The U.S. Department of Housing and Urban Development (HUD) recently announced the â€œBack to Work â€“ Extenuating Circumstancesâ€ program, aimed to help people who have lost their home through foreclosure, short sale or bankruptcy. HUD has reduced the previously required minimum of 36 months to 12 months before they may be able to finance another home, given that they meet HUDâ€™s minimum eligibility requirements.
What I can say is that it is important that the Agent representing the seller needs either a ton of experience, or they use a short sale negotiator. The experience will pay off in the end. The big difference will be made in adhering to deadlines and paperwork. Everything from the Hardship letter to the continued requirements, and the hours spent on the phone talking to the lender.
If a homeowner has this type of experience in their corner it can greatly reduce the time frame, however the time frame will hinge on the lender. Sometimes it is an awful lot like moving mountains and earth.
From the perspective of a home buyer, particularly in your circumstances with preapproval out around October, you will have to wait to write an offer. This may however be a good time to start looking for a loan officer (if you donâ€™t have on or your agent is doing that for you) and get all of your documents together, checking and rechecking just to be sure you are ready to move.
By all means keep looking, just because it is fun and you will have a better understanding of the market when October gets here!
Happy home shopping,
RE Market Solutions - Providing professional Short Sale solutions to Real Estate Agents and their Clients.
More importantly , if you do not qualify for a loan right now, you can browse homes, but you cannot write an offer. When you submit an offer for a home, you generally have to submit a lender letter of pre-approval and proof of deposit.
So- enjoy looking, get your credit in order, learn about the areas that interest you but you can't really get serious until you have yoru pre-qualification complete.
There is no average short sale approval time. It depends on the bank and the skill and negotiation skills of the listing agent and cooperation of the seller who has to provide voluminous personal financial information and the buyer who must be patient and flexible.
Here are a few questions that your agent should ask before even thinking about submitting an offer.
Has the seller submitted the short sale package to the lender?
Is the valuation process completed?
Is there more than one lien holder?
Are HOA and property taxes paid current?
How responsive is the lender to offers and counter offers?
Is a short sale negotiator working with the lender or is the listing agent?
No need to start looking now, get your financing in order first. Interest rates and property values will not fluctuate that much between now and October.
Keep in mind that just because it is a short sale does not automatically mean it's a good deal.
We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (855) 415-5626.
Sr. Loan Officer
Crosscountry Mortgage Inc.
Toll Free: (855) 415-5626 ext. 5734
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
The short sale timing depends on the lenders and debt/liens involved.
It could last from 2 months through 3 years (if Ocwen Bank).
It also greatly depends on the negotiator of the short sale.
There are amazing negotiators out there, but there are also agents who don't know enough
about a short sale process, which sometimes ruins the deal.
Your agent needs to be experienced in short sales - CDPE (Certified Distressed Property Expert) designation would be the best. You can find one on CDPE website.
Before going into contract, your agent will need to ask a lot of questions re. which banks are involved, what other debt/liens will need to be negotiated, how motivated the seller is (some change their mind and do loan modifications, f.e.), what bank(s) are involved, if there is a true hardship on seller's part etc.
This will help you evaluate how long the process will take (some banks are better than others).
Hope this helps!
Beachfront Realty, Inc.
All the best,
As I write hardship letters for folks who are attempting to get their short sales approved, I've seen how much turmoil these folks are in. Surely, they've struggled financially for a long time, and they certainly haven't been putting any money into the house. If they can't make their house payments, they certainly aren't going to be keeping up with maintenance. i'd be very careful with buying a short sale, myself.
Good luck to you...
There are three issues here as I see it.
1. You want to purchase a home in October of this year.
2. You want to purchase a short sale because you think that short sales are good deals
3. you want to know how long it will take to complete a short sale.
I will answer these questions in reverse order. First, you need to know that I have negotiated 40+ short sales with a 100% closing rate when I represented the seller. In my experience, short sale have taken as little as three weeks to as long as 13 months to negotiate, depending on the complexity of the situation and the skill level of the negotiator involved. You also need to be aware that the national closing rate for short sales is under 25%.
Short Sales can be â€œgood dealsâ€, although most of the time they are not â€œgood dealsâ€. Keep in mind that the seller is upside down and usually has no money to maintain the home, let alone repair deficient items. The lenders usually refuse to allow the seller to pay for repairs, termite clearances (required for VA & FHA transactions) delinquent HOA dues and home warranties, as well as other items that the sellers usually pick up in a â€œtraditionalâ€ sale. Often times, the short sale home cost less because it is worth less.
The better question is: â€œDoes the home that I am considering have the features that I desire at a price I can afford?â€ Ask your Realtor (select an experienced one) to show you homes that meet your criteria within your price rangeâ€¦.not just short sale listings.
You are thinking of putting in a bid to purchase a short sale home prior to your being qualified to purchase the home. That wonâ€™t work because your short sale offer will not be accepted unless you can prove that you are qualified to purchase at the time your offer is presented to the seller. Even if the sellerâ€™s agent is foolish enough to advise the seller to accept your offer, the lender will reject the transaction if you are not a ready, willing and qualified buyer. Other agents have suggested that you should start looking at properties to narrow down your likes and dislikes. That is certainly a good idea, although it is extremely unlikely that any property that you look at today will be available in October. You may want to wait until July or August to start your search in earnest.
If you would like to work with a knowledgeable Realtor that can really help you out, you can contact me at:
Claude Braunstein REALTORÂ®
CA Broker #00590130
Top 1% Nationwide
Coldwell Banker Residential Brokerage
Direct Tel: 858-271-7770
The listing agent will require you to provide your preapproval letter as well as proof of funds for the downpayment. I wouldn't start looking until you get the preapproval letter.
As a short sale listing agent, I would never accept an offer on a short sale if that person can't prove to me that they're qualified NOW.
If I had to pick an avg. for short sale time line, I'd say 60-80 days. This is dependent on the listing agents' experience, some can take 6mos+ if the agent doesn't know what they're doing.
You need to align yourself with an agent who is able to investigate & PRE QUALIFY the Seller & the listing agent of a short sale properly. If you would like me to match you up with an agent who can do this, just let me know. So, if you do end up offering on a short sale, you're going to get into negotiations with an owner who has a less difficult short sale situation & with a listing agent who has a good track record of closing the short sales they list.
Shoot me an email if you want to talk about this some more.I don't look back on this same Trulia thread for answers posted after mine.
Realtor Since 1996
Main Street Realtors
There is no average time for short sales. All lenders and circumstances are different. The most time consuming part of short sales is getting the seller's lender(s) to approve the short sale (in writing). I've had short sales approved in under 24 hours and I've had short sales approved in 3 months.
I suggest you wait until you have pre-approval on your loan before you start looking. Most sellers (if not all) want a pre-approval submitted with an offer before they will even accept your offer.
The average time is about 3 months for a short sale to get approved. You really don't need to start looking until you are approved in October. Anything before that is what I call "Window Shopping', or, just looking for fun. Feel free to contact me if you would like to look into the possibility of getting approved before October. Or, if you would like to start window shopping, I can send you listing that match your desired criteria, so you can start to narrow down your search. Between now and October, I recomend that you interview realtors so that you can find one that you would like to have represent you during your home purchase. I am available anytime to answer any of your future questions.
Keller Wiliams Realty, Sabre Springs
I remember the trouble you were having with the FHA loan you applied for and the last minute underwriter decision to deny the loan. It is crucial that you work with a good lender, like the ones that I use, to anticipate these problems. Sorry that it did not work out.
Looking at short sales is not really the solution even though they can take months to be approved. When you make an offer you will have to posses a letter of approval from a lender for the offer to be considered.
However that does not mean that you cannot start looking in advance. I could set up a search for you that will keep you informed of homes that are on the market and you can drive by and see what the neighborhood is like. Or you may want to use my website to look on your own. After you get the lender approval we could actively start looking at homes and prepare an offer on the home that you like the best.
If you would like to discuss anything about the home buying process, I would be glad to speak with you.
I am never too busy for your referrals
The San Diego Property Shop
CA DRE # 00648687
Timeframes for short sales are really all over the place. It really depends on the listing agent's experience and negotiation skills in getting it pushed through the bank ASAP. I do think it's a good idea to keep your eye on the market that you are interested in. Feel free to email me what you are looking for (in Poway?) and I can set you up to receive updates about the current market activity in your area.
That way you are fully informed when you want to buy!
McAllister Homes Real Estate
â€¢Offer signed by Seller
â€¢Approx 7 days â€“ Third Party Authorization/Package submitted to lender(s)
â€¢Approx 14 days â€“ Package confirmed received by lender(s)
â€¢Approx 7 days â€“ File assigned to Processor
â€¢Approx 7 days â€“ File reviewed by Processor to ensure completeness
â€¢Approx 7 days â€“ BPO/Appraisal ordered
â€¢Approx 7 days â€“ BPO/Appraisal completed and imaged into bankâ€™s system
â€¢Approx 14 days â€“ File assigned to a Negotiator
â€¢Approx 14 days â€“ File reviewed by Negotiator
â€¢Approx 14 days â€“ File submitted to Investor/Management for Approval
â€¢Total Approx Time = 91 Days â€“ FILE APPROVED!!!
It wouldnt be a good idea to start looking for any home until you are pre-approved because in order to submit an offer you must submit your pre-approval letter with it. Looking before your approval may be a set up for heart break. If you were to start looking at homes before your approval its possible you may fall in love with a home and by the time you get your approval it most likely will have been swooped up by another buyer! It would be a good idea to start doing some research to find out what areas you are interested in though!
If you're thinking about buying a home and you're not qualified until October I don't think you can buy before then because you will need a pre-approval letter from your lender in order to submit an offer. You might be surprised to learn that many houses get multiple offers and if you are not pre-approved your offer won't be considered.
Here's the good news - October is a great time to buy because prices tend to drop after Sept. You will be in a position to get an even better deal and you probably won't have as much competition. You might be able to get the seller to pay your closing costs and save even more money.
I suggest that you find a Realtor to work with - yes it's not too early to start that relationship. A Realtor can help you find a lender and the lender will help you with any credit issues, etc...
Good planning will help you get a great deal and find the right home.