Shortsales however are an animal, and I don't say that lightly, all of their own. I have seen locally a few attorneys stepping up to take claim as being able to process them sooner, however those results have yet to be seen. The last one an agent who works for me closed took almost 9 months. The buyer got a great deal, so it just depends on how willing you are to tough it out to save some $$!
With short sales, you have 2-4 months (sometimes longer) for the bank to review the seller's financials, get their own estimate of value and process the paperwork. It sits on someone's desk for a long time before anyone gets to it.
The banks just have too many of these to process them in a timely manner...and remember, this is a side business for them...not their principal business!
I am disappointed on a regular basis that there never has been a good system for dealing with short sales that would give them some consistency.
I did some research a while back on the closing time for short sales in El Dorado Hills. From the link below you can see the blog post I wrote with the results.
If you are buying a short sale you must have time and extreme patience!
A short sale requires you to negotiate a deal for the home with the sellers and then the sellers must submit the offer along with all of the other information the bank wants from them. It has to go through a system that can take six months so you better be willing to wait.
A delay can be caused by a realtor sending an "incomplete" packet of information to the bank.
A delay can be caused by overwhelmed, unorganized or inexperienced bank staff.
A delay can be caused by overwhelmed investors (actual owners of defaulted mortgages.).
If you encounter more than one of the delays above then get ready for a very long ride.
The banks and investors have to cut their losses as much as possible to stay in business. They have to consider
1. the new buyer and if their credit worthiness.
2. the losses already incurred by the defaulted mortgage.
3. the continued losses brought about by the defaulted mortgage and
4. the trade offs to Short Sale vs Foreclosure, just to name a few.
These are pretty big considerations and should not be taken lightly.
And another, more recently noticed variable, is that the value of property is on the rise. As an investor it might be wise to wait for a better sales price to help cut losses.
In the next year or so, I think the Short Sale dance will be adjusting yet again.
Typically short sales can take anywhere between 2-3 months now.
Foreclosures do not take that long. There is usually some time before you get an executed contract back, but that is never that long.
An experienced REALTOR handling a short sale should be able to negotiate in a better environment today than just a few months ago.
Then it depends on the Sellers ability and willingness to provide all of the required information needed.
We had a short sale we got the approval letter yesterday for...the house was occupied by a squatter so we could not get access until we evicted him. We got the squatter out and the Brokers Price Opinion (the process the bank takes on their side to determine value) was conducted on the 4th, probably submitted a few days later and yesterday the 16th, we received the approval letter from Ocwen, one of our easiest shorts to date.
However we did an FHA pre foreclosure with a big five bank somewhere in AMERICA and it literally took us a year and a half because the servicer kept passing on the file and dragging their feet.
But I will say, chances are if you are in escrow and the BPO was done let's say last month, count your blessings. Many of our short sales that are closing in the next month will find the Buyers in an equity position in today's market due to the increasing values in the last 30 days.
Patience is key but so is communication so have your agent consistently obtain updates from the Listing Agent asking what stage they are at.
Best of luck in your transaction
Realty World eCurb REALTORS
If you are looking at buying a home that is short sale, it's important that your buyer's agent check out the following: the seller has a legitimate hardship, How many loans need to be approved in the short sale, and the experience of the listing agent in negotiating a short sale. Knowing those factors will give you better insight into how long the approval process might take, and if it might be approved at all.
'Foreclosures' is a legal process by which a lender takes possession of a home when a buyer defaults on their contractual obligation of paying their mortgage.Ii assume you are talking about bank owned properties (sometimes also referred to as 'corporate owned' properties). Those properties were sold at auction, no investor buyer bought it, so ownership reverted back to the bank who is now selling it as an REO property. I don't believe that purchasing an REO is any longer than buying directly from a seller who has equity in their home.
Two loans can lengthen the process, however.