Home Buying in Spring Hill>Question Details

Sharon Todd, Home Buyer in Johnson City, TN

When buying a short sale home that people are living in. How long does it take to close on the property, and move in?

Asked by Sharon Todd, Johnson City, TN Mon Feb 25, 2013

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I've had short sales get approval by the seller's lender in as little as two and a half weeks, and as long as 14 months (and unfortunately, many times not at all)...

From the time you get approval of the seller's lender, they will generally condition their approval with you closing in 30-45 days from that point.

The two big issues that a buyer must accept when dealing with a short sale property is 1) the chance that the seller's lender might not approve the deal at all, and in fact end up foreclosing on the property (which means you waited usually 3-6 months to find out that you wasted your time) and 2) the chance that the seller's lender will come back with a number significantly higher than your offer amount (and sometimes significantly higher even than the list price for the property!

As an example of #2 - I had a short sale listing that was approved by Bank of America at $64,000. I had a cash buyer willing to pay the $64,000 that Bank of America required. Before Bank of America got around to approving the deal, they transferred the loan to NationStar Mortgage... not necessarily a HUGE deal in itself... except that NationStar wanted to start over from scratch (adding an additional 3-4 months to the process) and ended up telling my buyer that they wouldn't consider anything under $110,000... ouch.

Hope this was helpful for you, and if you have any other questions, please don't hesitate to get in touch!
1 vote Thank Flag Link Tue Feb 26, 2013
I agree with Bill below and want to add more more situation. If those living the property are tenants and they have a signed lease, you could end up purchasing the home and having to wait for the lease to end before you can move in. Best scenario they continue to pay rent and then leave. Worst...they are bad tenants and you have to evict them. It works much better if you know for fact the residents are the current owners. Was this answer helpful? If so please click on the "green thumbs up" or the "best answer".

Tony Vega
La Rosa Realty
1 vote Thank Flag Link Tue Feb 26, 2013
This is the $64,000 question.....and depends on a number of factors including:

1. how far along in the process the seller is in the short sale process

2. whether or not the lender is willing/able to work with the owner

3. if the seller is working with an attorney to assist in the process

4. whether or not paperwork is done in a timely manner

5. if their are multiple loans and/or liens on the property

With all of this said, one of the best short sales to attempt is one in which the asking price has been approved by the lender. This simply means that the seller and their lender are far enough along in the process that the hurdles associated with the transaction have been crossed....this should streamline the process greatly and save loads of time.

Hope this information is helpful to you.

Good luck,

Bill
1 vote Thank Flag Link Tue Feb 26, 2013
That depends on a lot of factors. In order to get a short sale finalized you need the owner, the bank, the buyer and both realtors and attorneys to all cooperate. If things go smooth as silk you could be in your new home in about 90 days, but it has been my experience that it will take about six months. Mostly that delay is due to banks who still can't seem to get their act together to get these transactions done quickly. However, for you, the buyer, the pay off is that you should save money and end up with a home that has equity from the very start. Only you can decide if it is worth the wait.
1 vote Thank Flag Link Tue Feb 26, 2013
Sharon,

Every short sale transaction is different. If the bank has approved the short sale price, than the time period to close is shortened considerably. On average, you can expect to wait a minimum of 120 days to close. If you do purchase a short sale home, you have to be very patient and understand that many weeks can go by without a single word from the short sale lender. The processors/negotiators are buried in short sale transactions.

I would be happy to answer any other questions you have about short sales or any homes that you find an interest in that are located in the Tampa Bay Region of Florida in Hernando, Hillsborough, Pasco and Pinellas counties. Just contact me through my Trulia PRO profile.

Sincerely,

Fred Strickroot
HomeNet
FL Lic. Real Estate Broker
727-478-8997
0 votes Thank Flag Link Fri Mar 8, 2013
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