The majority of homeowners in need are not getting the help they need due to poor communication on the program, lack of resources at the lenders, and backlog of cases.
For short sales, we are seeing consolidation in the industry. If you are lucky enough to have your loan transferred under Wells Fargo, you will get timely responses, and the cases will close. We have closed quite a few since Ocotber. The negotiators are really case managers, and they work typically from 4pm to midnight...at least the ones we've been dealing with have. I don't understand what you mean by your attorney filing the BPO...that is not relevant to anything in the process...the BPO gets done, and you receive a counteroffer from the lender.
Once you and the lender agree are close with the terms, the addendum docs will be forwarded for things like:
listing extension, contract addendums, arms length agreement, etc...A verbal approval means nothing for setting up a closing or packing your bags...Your attorney needs that in writing...and if they are not getting a response they need to escalate to the negotiator's supervisor. If the BPO doesn't come in where the true AS IS value needs to be based on what people will pay for the home, do a BPO appeal. Most attorneys will not do this - takes too much time. A major chunk of our business comes from attorneys who need the help getting the short sale prepared, presented, negotiated, and closed for their clients. Bottom-line: 4 months isn't too long, but if the BPO can be verified that it is acceptable, you should be able to close within 30-60days.
#1: The selling agent must be agressive, must have experience in short sales, if the short sale package is not already prepared before you put your offer, find out why!!!
#2 The selling agent must be a sales person and be able to negotiate with the banks.
#3 Follow up, call once a week. The more you call, the more the selling agent will be on the ball.
#4 I have waited up to 4 1/2 months to hear an answer, unfortunately I have lost at all times.
#5 The longer they take to respond the more chance other offers may come in, be on the ball to help avoid this
#7 Make sure sellers interest is to sell the home and not to renogotiate to stay in the home
#8 Do a cost comparison before you put an offer, this can hold things up, make sure you are not offering more than the house will be appraised for, all though the offer price can be renogitiated
#9 Make sure your realtor is also aggressive and able to keep you informed.
I have had fair amount of expierence in Short Sales, the process is being more streamlined as each month and dollar goes out the window. As HELOC's (Home Equity Lines of Credit) turn their files over to Loss Mitigation Departments the process should become faster. I have had it take 4 months on one specific house but as late as this week, I have had it take only a week and half for acceptance, it really depends on how well prepared the listing agent is.
Hope this helps.
It could take from a couple of weeks to six months. There is no for certain answer. I can tell you if there are mulitple loans on the property and the offer is extremely low, it will take the lender forever to give you an answer.
Make sure your agent check in on a weekly basis. Good luck.
As the process has evolved over the past 6 months, here's what we're finding...
the most critical part for getting short sales approved in a timely manner is to get a contract AS QUICKLY AS POSSIBLE. Which by the way - is the easiest part...our group has investor buyers with cash to buy up these properties, so the realtors don't have to spend a lot of time and money marketing the home in the hope they will get a price that will satisfy the sellers mortgage balance...it is not happening because the homes are too upside down. After the offer, contract, HUD1 and the rest of the short sale package are presented to the lender, we need the BPO ordered as quickly as possible - remember, the highest priority in a short sale is to get the homeowner out from under a mortgage they can't afford, so they can avoid foreclosure - regardless if we are asked by a investor buyer or whoever to help them negotiate the purchase. We get the BPO to be in line with the true FMV, and we build equity into the property through the negotiation. As long as we show that it is less costly for the lender to approve the short sale vs taking the home back in foreclosure, we will get the sale approved.
Is it worth the wait? Depends on the buyer - will they live in the home , or are they an investor.
An investor will wait most times - the non-investor will probably want a quicker answer because they are timing a move from their current home. We are seeing short sales accepted in as little as 2 weeks up to 4 months...depends on the lender and their case load...But, there are ways to making them move quicker based on the case we present...we need to create a sense of urgency based on the cost to the lender to not settle quicker.
The really neat thing that we are dealing with is the loss mitigation negotiator who offers us a loan modification as part of the negotiations...this works to our advantage if we have a homeowner/seller that really doesn't want to move, and could afford to stay if the payment was more affordable. Many times the lender will not approve an initial request for a workout/loan mod, but when they realize we are working on a short sale, they will offer a workout to do whatever is needed to keep the loan current. This presumes the homeowner can qualify...but we would know that from the financial balance sheet we provide as part of the short sale negotiations.
Hope this helps...
You are a very Patient man! I've heard of banks taking up to six months to reply to a short sale offer, though I believe that it's often just under a month. Do you still want the property? Have you been looking at other properties in the mean time? Prices have come down in the last four months. Did you put in a expiration date on your offer? If you used the CAR (Calif Assn of Realtors) Residential Purchase Agreement & did not specify an expiration of the offer, it automatically expires at 5:00 pm 3 days after the offer is received by the selling agent. This does not mean that your offer isn't still valid, it just means that the seller (bank) can't hold you to the offer if you are no longer interested.
As others have mentioned, your Realtor should be in weekly contact with the selling agent, who may or may not be able to shed any light on the bank's timeline. If you really want this house at the price you offered & you can afford to wait, stick it out. If you're not sure, start looking at other homes, preferable those not "in foreclosure" & you might find something you like better, with a seller that will respond to your offer in a few days, if not a few hours!
I can relate to your short sale with BOA and I've been waiting to purchase a home for 12 months now. The latest deal with BOA is an "updated approval letter" since the first was done last July. There are other factors involved with short sales that are NOT just the bank. In my case, the owner has been taking his sweet time filling out proper paperwork due to his bank, our realtors, home insurance company, etc. I just don't understand why the bank does not pick up on the owner "milking the system" to stay in the home not paying a cent??? He has not even taken out his belongings, yet... while knowing we have a contract (which has been revised with an addendum 5 times in 12 months)....
I also feel the short sale realtor has not been doing her job properly and effectively. This also prolongs the process!!!
Best of luck to you... and hopefully, you will know you are not alone in this process....it will hopefully pay off in the end for both of us :0)
I received more than thirty offers on the property. I discovered that all but four offers never stood a chance of being accepted by the buyer, let a lone approved by the bank. After careful examination, I concluded that the offers that didn't stand a chance were either written by agents whom didn't counsel their buyers properly and only wasted their buyers time or they were written by agents who should not be working in real estate.
Most agents will tell you that short-sale transactions are difficult and time consuming. Well, they are if you don't establish a good foundation. Not all short-sales will be approved by the banks. Knowing that ahead of time, by asking the right questions, before making an offer, will save you time and save you from disappointment. . I think short-sales are easy and I like doing l short-sale transactions.
The Real Estate Consultants.
It is now 2 1/2 years since you posted this question. Can you advise how it turned out?
Its going to be a hot day in Northern California.
Also how did you make out on the home, did you land up buying it.
Prices did come down in LA since 2008 when you may have got the place.
You should get an answer with in a week or less..
I think in this case, no answer is the answer, the bank did not take your offer for some reason.
I have a lot of short sale listing please feel free to call me anytime,
1917 Hillhurst Ave
Los Feliz, CA 90027
Certified Distressed Property Expert
Having done over 40 Short Sale transactions
here are my thoughts on your situation: Either you are very close to getting an answer or their is more to the story than the listing agent is telling you.
What you need to know is the FF and you will pretty much know if you should wait for this home
1. Has the Listing aAgent been updating your agent regularly? If not then have your agent follow up with the listing agent
2. What are th ecredentials of the Listing agent has the agent done about 10-20 short sales and has he worked with this bank before and successfully closed something to know their proces, if not then move on its probably a situation where the Loisting Agent may not be seasoned enough to know what to do.
3. Most short sales have somekind of response or a process that a good submission of Short Sale pakage + a well qualified offer should get. In my doing over 40 short sales none of my buyer and their agents were left to ask this question on Trulia.
Their aint no bank which will have no response in 4 months unless the listing agent has been doing something wrong ( or the person negotiating this file... it may be an out side vendor hired by the agent or the seller).Your offer is already expired you can move on unless you left the buyers SSA empty on the walk away date?Wish you luck Sir.
For more info on Short Sales , how to avoid foreclosure , buying a home or selling a home log on to
Why? There are several factors that have impacted the short sale market.
1. Lenders are now fully staffed. Loss mitigation departments that were overwhelmed when this market changed now have trained staff in place to handle the number of files they are accommodating. Lenders are also better able to predict what properties will become short sales, based on offerings of loan modifications and better market information.
2. Training is at a much higher level, both with lenders and with listing agents. One caveat: there are still buyer agents who refuse to acknowledge this segment of the market, bury their heads in the sand, and get information and training for short sales. How well prepared the agents are has a direct impact on how smoothly and quickly the file goes.
3. Most lenders now have STREAMLINED SHORT SALE PROCEDURES, meaning that files which used to take 6 months are approved in 45 days. I had a short sale with Wells Fargo approved in 19 days last month. In addition, lenders such as Wachovia are now giving incentives such as up to $5000 moving bonus to the seller and 30 day approvals. Gone are the days of months and months with no answer.
4. Second and third trust deeds are willing to take much less on their liens, allowing short sales that were held up in the past to proceed.
That being said, every transaction is different, and every lender is different. How cooperative is the seller? How quickly do they get the required documents in to the bank? How motivated are they?
4 months is a L-O-N-G time in this environment. I have put together a list on questions that the buyer's agent can ask of the short sale listing agent, to ascertain how long the file will take, and how able the agent is to deal with it. If you'd like a copy, let me know by contacting me below.
Best of luck.
Certified Short Sale Professional
Certified Home Retention Specialist
Blogging at: http://TheBremnerGroup.com/blog
Sometimes an agent of a "stuck" file is resistant to this idea, because it usually means giving up some of his/her commission - If you really want the house, and the agent won't budge, how about agreeing to pay the negotiator's fee as part of your closing costs? Short sale responses just don't take 4-6 months anymore. If it's been that long, you need to step it up aggressively.
The banks failed because of greed They want me to payall of th prior owners bad paper when the loan was destined for the bailout from the start. They can take a flyng leap out of a corporate jet.
I will take my cash and move to TN No ST tax.....property tax next to nothing. a house Paid In Full....I just may shake hands at Walmart
We were waiting on appraisals. There are 2 banks involved w/the property, and both were allowed to have independent appraisals. All appraisals came in close to our offer (within $50K), but BofA is disregarding the appraisals and hiking up the price by another $250K.
I guess I need to wait out BofA while they test this price? Or up our offer a little.
I have had situations where we hear back from the bank within the month, and others where it's taken more than 6 months to get a response. Us Realtors are hoping that the banks start responding quicker in order to move out some of this inventory that has been sitting for an extended period of time. Until the offer has been formally accepted, you are not under obligation to wait any longer if you don't want to. You can move on to another house, or continue to wait. The bank may very well come back and counter your original offer anyway, which could take longer. I wish you luck!
It's highly unlikely that the selling lender will pay closing costs or repairs. Don't ask.
Also, the selling bank has the right to accept a higher offer, even if yours is accepted first.
Remember, these are the guys who brought us credit default swaps.
1.) Is there more then one loan on the property, more then one and it will usually take 2x as long.
2.) Is the packet totally complete or will they come back and ask for more data or more current data (meaning if the bank statements you submitted go back farther then 2 months make sure your seller provides the most up-to-date info they can) that could have been in the initial packet. Wise listing agents will review the packet and have a checklist so they don't miss anything. Missing info can literally add weeks more to the response time.
3.) Is the price within a reasonable formula for a bank to accept. Did the listing agent drop the price 50% of value only to get offers quickly or can they prove that they "tried" to get higher and came down in price gradually over time. Many deals are lost at the BPO or apprasail the banks will do. Most banks find every 15 days drop the price 5-8% acceptable until you recieve an offer.
4.) Is the offer written so the bank will accept it easily. Putting "sold as-is" is essential. Most banks will even pay closing costs if it makes sense for them on the "net" end of things. If a property is priced extremely below value don't come in trying to get it for free, present the bank a good offer on an outstandingly good priced home and you will reap the rewards when the market turns around!
Short sales require first and foremost patience on all sides. I think agents should consult buyer about the relatively long process and ask their buyers upfront if they are truly willing in a month or two from now to stay in contract if they still hadn't heard anything. Buyers will have time upfront to see if they are willing to wait. It's not for everyone and that is ok.
Working short sales is now averaging for me about 2-4 months. Much faster for junior lien holders...they want their money quick, and understand they will take a hit - so better to approve it fast so they don't get blamed for slowing things down. The delay I'm seeing is with the first mortgage lender. In some cases, loss mitigators are working on upwards of 100 files per day! This really impacts the most critical part of the short sale negotiation and approval - the BPO process. ASC for example is now saying up to 90 days before the BPO is ordered.
The tricky part is managing the buyers and sellers expectation during this. Once the lender has their legal folks send the first letter of foreclosure being initiated (usually after 90 days delinquent), the pressure gets hotter and service and communication to all parties is important to maintain...especially to you the buyer and the seller. Also -lenders don't like having offers pulled, then new ones submitted...it delays the process even further...for you, you can just walk away..for the short sale specialist (me) and buyer, things get tricky when a buyer pulls out. But I completely understand your reasons to do so. You have to understand going into this kind of transaction that it takes time and patience. Regards.