Home Buying in 54901>Question Details

Samanthaolso…, Home Buyer in Oshkosh, WI

How long does a short sale really take?

Asked by Samanthaolson32, Oshkosh, WI Sun Sep 2, 2012

We recently had an accepted offer on a home (August 28) and it turns out that the house is a short sale. We are waiting for the approval from the bank and our agent gave them until Sept 24 to give us an answer. From what I have heard this seems like an impossible deadline for the bank. Will they really give us an approval by Sept 24th? Also, once bank approval comes, can we change our closing date to a later date?

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Tim, it is not fair to respond negatively about another agent on Trulia, esp. when you are not familiar with the WI state forms for Real Estate transactions. Our contracts allow for a deadline for lender approval, not to try to "bully" the bank but to give the buyer an "out" if the progress is not being made in a timely manner. Again, buyer and sellers can renegotiate dates and deadlines as they agree to do so.
2 votes Thank Flag Link Sun Sep 2, 2012
A short sale (SSO). may take a month or many months. There is no rule of thumb. What seems so logical to you and me, is not so with banks handling SS. If you have the time to wait, they are usually worth the time.
0 votes Thank Flag Link Sat Feb 16, 2013
My first comment is that before you had an accepted offer on this property the fact that it was a short sale should have been disclosed. It's considered an adverse fact and would have been helpful information to you when negotiating your offer.

If an SSO (Short Sale Offer Addendum) was included at some point with your offer and the September deadline of the 24th was included, should that date come and go with no approval from the seller's bank, you are no longer obligated to that offer. If you choose to want to stay involved with this offer & property, you may do so by formally extending that deadline or just sitting back and letting the clock tick. If you don't formally extend the deadline, you still have an accepted offer, but are free to pursue other homes. I would suggest you formally dissolve the offer prior to writing an offer on another home should you find something you like better.

As for whether that's an impossible deadline, every transaction is different. A shorter deadline like the one you have, might be a good thing in that it may make the bank take notice and move things along. You can always extend that deadline if you choose. If the listing agent proves that the seller's lender has been making progress with the transaction and their decision, you may want to stay involved with this offer. Sometimes during this time period the seller's bank is reevaluating the current value of the home, the seller's financial situation or other liens they may have to pay out from the proceeds. The waiting period can be very unnerving for some agents and buyers because there is often a lack of information or the appearance of progress.

As for changing the closing date, that can be done as long as all parties to the transaction agree. Usually, if the seller's bank agrees to your offer, but the dates & deadlines of the offer are now unreasonable to accomplish a closing in the original time frame, the bank understands that for you to get your lending & inspections completed, you'll need more time. In most cases these deadlines are renegotiated if & when the bank approves your offer.

Short sales are not for everyone. They take a patient, flexible buyer that doesn't need to be in that home in any specific time. The process has become better than it was a few years ago, but it still can be very time consuming & stressful for all parties involved. Good luck with your offer.
0 votes Thank Flag Link Mon Sep 3, 2012
Samantha: I have worked on short sales for over 7 months in which the buyer kept extending the closing date out in their contract and the bank never did accept the short sale. There is no way to know how long it may take and if it will really happen.
0 votes Thank Flag Link Sun Sep 2, 2012
I would wonder about the experience of any agent that gives a bank a deadline. That is pretty ludicrous at best and shows they are not well seasoned in dealing with short sales. I have waited months just to get a no. If you are in a hurry then walk away from short sales because they are not quick and you can not bully a bank to hurry. The bank can ignore you and never accept the offer or allow a short sale either. You just never know with short sales how it will end up. Many, maybe over half, never close and just fade away.
0 votes Thank Flag Link Sun Sep 2, 2012
The specific answers to your questions regarding your offer should come from your agent. In general, short sales take as long as the bank decides they need to make a decision and other factors relating to the house. That is, the specific circumstances of the Seller, the number of liens against the property, how cooperative the seller and agent are in providing the documentation to them that they require and the communication between all parties on the Seller side. It is usually a frustrating process for everyone, but sometimes, when patient, it can end in being a great transaction for both the Seller and the Buyer. As far as delaying the closing date, that is something that the Buyer and the Seller always need to agree to in writing whenever it is necessary.
0 votes Thank Flag Link Sun Sep 2, 2012
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