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What's the typical process when buying a short sale?

Asked by Trulia, San Francisco, CA Mon Mar 5, 2012

How long does it take? What are some pitfalls?

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Answers

5
1. placing offer on a short sale listing ( 1 day)
2. Seller accepts offer ( 1-3 days)
3. Start Short Sale and receiving approval with the bank (30-90 days depends on the lender)
5. escrow (30-45 days)


I'm very familiar with Short-Sale Transactions - please feel free to contact me direct if you need help.

Please feel free to call me 424-777-9377 - i'll be happy to help you out.




Thank you for your time.


Should you have any questions - please feel free to call me Toll Free: 1-855-TRUST-55 (1-855-878-7855) ext. 777.



Sergey Fednov

President - Realtor®
- Trust Sale Realty -

Residential & Commercial Real Estate
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8 votes Thank Flag Link Wed Apr 11, 2012
I would suggest first finding out where the seller is in the Short Sale process. There are many new programs that allow for expedited short sales. Here are some questions to ask:

1) Has the seller been in contact with the Lender?
2) How many lien holders are involved?
3) Has a short sale package been submitted to the Bank or Lien holders?

Knowing how much work has been put in up front will help you to gain a better understanding of the timeline for the process as a whole.
Web Reference: http://www.SarahKosasky.com
1 vote Thank Flag Link Mon Mar 5, 2012
Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home like some may think. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.

After the seller accepts the offer, the listing agent will send the following items to the bank:

Listing agreement
Executed purchase offer
Buyer's preapproval letter and copy of earnest money check
Seller's short sale package
If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package.
The Short Sale Process at the Bank

Buyers may wait a very long time to get a response from the bank. Let buyers know it could take anywhere from a month to 6 months, and worse case a year. Buyers may get so tired of waiting for short sale approval that they may feel the need to back out. Buyers need to know that threatening to back out will not have any affect on the banks time line. So, in short a short sale purchaser must be patient.

Typical Timeline:
Bank acknowledges receipt of the file. This can take 10 days to a month.
A negotiator is assigned. This can take 30 to 60 days.
A BPO is ordered. The bank probably will refuse to share the results of the BPO.
A second negotiator may be assigned. This can take another 30 days.
The file is sent for review. This can take 2 weeks to 30 days.
The bank may then request that all parties sign an Arm's-Length Affidavit.
The bank issues a short sale approval letter.

Erica Texada
Mersal Realty
214-680-4566
1 vote Thank Flag Link Mon Mar 5, 2012
For the buyer, the process is not much different than a traditional sale, however it may take longer (45-60 days).
Working with a broker who is educated about the short sale process will definitely make the process faster and smoother. As a broker who is Equator Certified, as well as a Certified Distressed Property Expert (CDPE), I would be happy to assist you with your purchase. Feel free to contact me anytime at (310) 403-4623 or brian@brokermalibu.com - Good Luck!
Web Reference: http://www.brokermalibu.com
0 votes Thank Flag Link Mon Mar 5, 2012
The most important thing to remember is that you need a lot of patience and the longer you can keep your frustration with the Lender's lack of concern iof your time in check, the better the odds that you will buy something. Also remember on 25 per cent actually close.
Web Reference: http://www.endrebarath.com
0 votes Thank Flag Link Mon Mar 5, 2012
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