Home Buying in San Diego>Question Details

lisasewell04, Home Buyer in Poway, CA

Average Short Sale time

Asked by lisasewell04, Poway, CA Fri Mar 30, 2012

What is the average short sale completion time when buying a short sale? Or is there an average? I'm not qualified for a loan until October of this year, but was considering maybe looking at short sales since it seems like they take a while to close. How far before october should I start looking??

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Patti Kane’s answer
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
0 votes Thank Flag Link Sun Jun 23, 2013
12 months after a short sale you're now eligible for a new HUD program for an FHA loan, as long as you have reestablished positive payment history after the short sale

The U.S. Department of Housing and Urban Development (HUD) recently announced the “Back to Work – Extenuating Circumstances” 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 HUD’s minimum eligibility requirements.
1 vote Thank Flag Link Thu Oct 24, 2013
We have been focusing on distressed homes and using the short sale process for a large majority of our clients. Although we have seen a reduction of time needed to close the file, it depends on to many variables to come up with a hard and fast rule.

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 don’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,

Terry Hammill

RE Market Solutions - Providing professional Short Sale solutions to Real Estate Agents and their Clients.
1 vote Thank Flag Link Sat Apr 14, 2012
There is not average, I'm afraid. I've seen some short sales close in months and others that take a year or more.

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.

Good luck.
1 vote Thank Flag Link Fri Apr 13, 2012
You need to be qualified when you make your offer. The expectation or hope that you will qualify in October does not mean anything to the seller who must evaluate your offer now. Sellers will reject your offer and if a seller was unwise enough to accept an offer from you, it would not get anywhere with the short sale bank.

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.
1 vote Thank Flag Link Wed Apr 4, 2012
There are many factors that contribute to the length of the short sale process. It can take anywhere from 2 months to 1 year. Most of mine are getting done in 2-4 months.

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.

Good Luck!
Web Reference: http://www.sdhomeseeker.com
1 vote Thank Flag Link Fri Mar 30, 2012
Unfortunately when it comes to short sales, there are no set standards of time; much will depend on the lender, some of quicker than others; the number of liens involved; who is negotiating the sale on behalf of the seller; is/was required paperwork submitted in a timely fashion, etc. Be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously.
1 vote Thank Flag Link Fri Mar 30, 2012
2 to 6 months, average I would say is about 100 days. For mortgage help, call or email for a free pre-approval in less than 10 minutes. We lend our own money and are licensed in 49 states.

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.

Brad Neumann
Sr. Loan Officer
Crosscountry Mortgage Inc.
Toll Free: (855) 415-5626 ext. 5734
Email: bneumann@myccmortgage.com
NMLS# 948036
0 votes Thank Flag Link Sat Nov 9, 2013
that is a great question. I put an offer in on a condo on December 5th and am still waiting. The other offer I put in was on February 3rd and that was supposedly at a price approved by the seller. I'm getting discouraged because everything that is in my price range in the area I want to be in is in a contingent status. Not sure If I should continue to wait to just let them go.
0 votes Thank Flag Link Fri Apr 13, 2012
**the other buyer
Flag Thu Nov 20, 2014
if it's contingent (and not pending), you can "bump out" the other seller if you are able to buy it now and not need to wait for your home to sell. just a sneaky FYI ;]
Flag Thu Nov 20, 2014
Great question Lisa!

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!

Irina Karan
Beachfront Realty, Inc.
0 votes Thank Flag Link Tue Apr 3, 2012
All short sales are different. There is no average time. The longest I ever had was eight months, but sometimes you get surprised and they can close quickly especially if the price they are listed at is pre-approved. When you place your offer they will ask for a pre-approval or pre-qualification letter so you will need to contact a lender to get the process started. If this can't happen until October then it may be best to wait. Discuss your situation with your agent for additional guidance.

All the best,

Gary Geer

0 votes Thank Flag Link Mon Apr 2, 2012
I agree that waiting until you have the financing is the best plan. I've seen it take 3-6 months for short sales to close.

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...

Becky DeGrossa
Web: http://hardshipletterin2days.com
0 votes Thank Flag Link Mon Apr 2, 2012
There is no easy answer to this question as the "time" it takes depends on many factors. If the listing says it is a bank-approved short sale, however, I would assume that it would take less time than a home listed as a short-sale, but the bank has not yet approved it. In some instances the bank is only servicing the mortgage, and it's an individual investor or investor group that holds the mortgage and has to make the decision. Regardless, because you don't know when an offer might close (I've had some close in 6 weeks from first offer) you cannot submit an offer to purchase property before you are qualified for a mortgage. I don't know of anyone who will accept an offer without it being accompanied by a letter saying that you are pre-qualified.
0 votes Thank Flag Link Sat Mar 31, 2012
Hi Lesa!

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 “good deals”, although most of the time they are not “good deals”. 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 “traditional” sale. Often times, the short sale home cost less because it is worth less.
The better question is: “Does the home that I am considering have the features that I desire at a price I can afford?” Ask your Realtor (select an experienced one) to show you homes that meet your criteria within your price range….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 won’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 seller’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 REALTOR®
CA Broker #00590130
Top 1% Nationwide
Coldwell Banker Residential Brokerage
Direct Tel: 858-271-7770
E-Mail: Claude@ClaudeBraunstein.com
Web: http://www.ClaudeBraunstein.com
0 votes Thank Flag Link Fri Mar 30, 2012
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.
Jason Anderson
0 votes Thank Flag Link Fri Mar 30, 2012
If you're not going to be qualified for a loan until October, you can't put any offers in on short sales now, even though they can take a while to close.

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.

562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes Thank Flag Link Fri Mar 30, 2012
Yes, I don't have a problem getting pre-approved or having a letter saying so...it's just that the loan will not fund until October (when the underwriter's get ahold of it. ) I've already had 2 offers in on other homes (one was a backup, the other one just fell thru cause of the loan issue). I was just curious if I was looking to move around Oct/Nov, if it would be way far off for me to look at short sales. Thanks for all the info!
0 votes Thank Flag Link Fri Mar 30, 2012
Hi lisasewell04,

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.

Shanna Rogers
SR Realty
0 votes Thank Flag Link Fri Mar 30, 2012
Hi Lisa,

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.

Kevin Sanderlin
Keller Wiliams Realty, Sabre Springs
Cell 858-212-4702
0 votes Thank Flag Link Fri Mar 30, 2012
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.

Best wishes,

I am never too busy for your referrals

Jerry Heard
Your Broker
The San Diego Property Shop
Direct 619-920-9796
Office 619-269-5545
Fax 619-269-9168
CA DRE # 00648687
0 votes Thank Flag Link Fri Mar 30, 2012
Hi Lisa,
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!

Sinead McAllister
McAllister Homes Real Estate
0 votes Thank Flag Link Fri Mar 30, 2012
Below is a good look at a time line that a short sale file may follow. This timeline varies from lender to lender but this give you a good idea of the process so that you can keep up with were things are at. There are also a number of things that can delay each process, especially when more than one bank is involved:

•Offer signed by Seller
•Approx 7 days – Third Party Authorization/Package submitted to lender(s)
•Approx 14 days – Package confirmed received by lender(s)
•Approx 7 days – File assigned to Processor
•Approx 7 days – File reviewed by Processor to ensure completeness
•Approx 7 days – BPO/Appraisal ordered
•Approx 7 days – BPO/Appraisal completed and imaged into bank’s system
•Approx 14 days – File assigned to a Negotiator
•Approx 14 days – File reviewed by Negotiator
•Approx 14 days – File submitted to Investor/Management for Approval
•Total Approx Time = 91 Days – 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!
0 votes Thank Flag Link Fri Mar 30, 2012
The short sale process has changed considerably and they are closing in 3 to 4 months. That's a much better time frame than 6 months to a year or longer.
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.
Janet McCarthy
Connect Realty
0 votes Thank Flag Link Fri Mar 30, 2012
Short sales used to take up to 6 months, but now the average is about 60-90 days for bank response. It may be as little as a couple weeks, or as long as 6 months. You will also be in escrow for 30-45 days. One problem with looking before you qualify is in this market all offers need to come with a letter stating you are pre-approved. Most Realtors will not pick your offer. I would love to help you get prepared for October. Please call me (619)-985-9767. I look forward to speaking with you.
0 votes Thank Flag Link Fri Mar 30, 2012
Unfortunately, there is no average time and the individual banks can vary. Since you don't qualify to purchase until October, I would recommend interviewing a REALTOR now, meet with to go over your wants and have them send you updates on the market. You don't want to look too early and get emotional on a home that can't be yours. Take your time, take the emotion out of it and start saving up so when you can purchase, you're ready to go.
Take Care,
Erik Weichelt
0 votes Thank Flag Link Fri Mar 30, 2012
You will need to include a pre qualification letter along with any offer for a bank owned or short sale, so you might not be able to get one before October. Why focus on train wrecks, find the house you like no matter if it is a short sale or regular, they all must compete in the market these days so you might find a better deal that is NOT a short sale. Shorts sometimes sell for more than listed price and some never get approved at all. I would suggest you wait until you know you can buy before making an offer.
0 votes Thank Flag Link Fri Mar 30, 2012
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