Home Buying in 53227>Question Details

Bill, Home Buyer in Milwaukee County, WI

What is more beneficial to the bank, to sell a house as a short sale or foreclose and sell it?

Asked by Bill, Milwaukee County, WI Sat Nov 26, 2011

We are waiting to here from the bank on a short sale that was very close to forclosure. Seller has acceted our offer and it's been over 5 months.

Help the community by answering this question:


Hi Bill,
I understand it can be frustrating when you have an accepted offer on the table, and it appears as if the bank is ignoring you. A short sale transaction can take 4-6 months to complete; it will take closer to 6 months if it is not being handled by a local bank. I guess it all depends on how badly you want this home...a great home in a great location at a great price may be worth the wait! If not, you may want to move on to bigger and better things.

I agree with all of the prior comments...you need to be working with a realtor that can guide you through this process. Ideally you should be represented as a buyer's agent to protect your interests and also allow the agent to advocate on your behalf.

Please let me know if I can be of assistance to you!

Best Regards,


Kris Plechaty @ First Weber Group Realtors
1 vote Thank Flag Link Sat Nov 26, 2011

In this case, it's not likely that it's a matter of determining which scenario is best for the lender. You should be considering whether or not it's worthwhile waiting this out any longer. A 5 month waiting period may be an indication that something isn't right. Consider asking the following question to the listing agent:

Has the selle submitted all of the necessary paperwork?

Has the seller filed a letter of hardship?

Has the lender appointed a "loss mitigator" or negotiator?

Has the bank had an appraisal or BPO's done on the property?

Does the lender appear willing to work with the seller?

Are there multiple loans or additional liens on the property?

Is the bank providing regular feedback?

Where is the lender in this process?

Eventhough there may still be hope...at this point, we would recommend continuing to investigate the real estate market for other options.

Best wishes.

1 vote Thank Flag Link Sat Nov 26, 2011
I agree with all the answers below...
0 votes Thank Flag Link Sat Nov 23, 2013
I agree with all the answers below...
0 votes Thank Flag Link Sat Nov 23, 2013
If the "bank" is the owner of the mortgage it is in their best interest to do a short sale rather than let it foreclose. In a foreclosure they will lose even more money. However, in many cases the "bank" is the servicer for the loan and the loan is actually owned by an investor. In this case the bank is really a middleman. In these situations communication and negotiation can take longer. I have had short sales take up to year, but still close. If you really want the house and consider it a good deal your patience might be rewarded.
0 votes Thank Flag Link Sun Nov 27, 2011
The short sale process has improved in the last 6 months with some banks still being slower than most. 5 months is a long time. Ask your agent to find out from the listing agent if the seller is cooperating with the bank as the bank will not move forward without the seller's cooperation. Find out if the seller has a true hardship and if all of the required documentation has been submitted. Ask your agent if your offer is "fair market value", some banks will reject a short sale just because the offer was too low and the short sale has been in process for a long time. Also ask if the bank has done either an appraisal or a broker's opinion of value. Good Luck!
0 votes Thank Flag Link Sun Nov 27, 2011
typically it is better for the bank to accept a short sale. But that has no bearing on whether or not they will. They will evaluate the current deal and then make their decision. I've seen banks make lots of mistakes but unfortunately the decision is in their hands.
0 votes Thank Flag Link Sun Nov 27, 2011

Without knowing all of the details of your offer I would say its time to move on. What was your original closing date? I'm guessing you are well past that if you've gone 5 months already. If the lender can't give you an answer after all that time its time to get out of this contract and find another home. If you are not working with a licensed Realtor you should seriously consider hiring a buyers agent who can represent you and your interests in the transaction. There are numerous benefits to working with a licensed agent and best of all there is no cost to you as the buyer!

Troy Miller, ABR, RNG
0 votes Thank Flag Link Sat Nov 26, 2011
Bill - are you working with a realtor? You should be! The answer to your question is, logically, it is more beneficial to do the short sale, but the banks are overwhelmed and, since they are being 'bailed out' by the government they get their money either way so they just really don't seem to care one way of the other. However it is more beneficial for YOU too to have a short sale on your record rather than a foreclosure. You really need to be working with a team of professionals, including a realtor and an attorney, who are very, very familiar with short sales and negotiating them! Believe it or not, five months is not unusual. And more than likely the bank will keep putting the foreclosure off as long as the offer is on the table.
0 votes Thank Flag Link Sat Nov 26, 2011
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