Home Buying in 12589>Question Details

Donna, Home Buyer in 12589

Why do short sales take so long to reply?

Asked by Donna, 12589 Sun Apr 12, 2009

I have a bid on a house in ulster county ny, it has been 3 months and no word. You would thing a short sale would want to process quickly. Why does it take so long ? If I put a time frame on a bid would it motivate them at all?

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8
Donna
The main reason is that they are simply swamped. My understanding is that some managers have case loads to 250-300 files and they are working to the best of their ability.

You just need to be patient. Having a good listing agent is helpful. Have your agent stay in touch with the listing agent on a regular basis.
1 vote Thank Flag Link Mon Apr 13, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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I have found that many banks spend a long time to decide what they will do then want you to hurry up and do it once they do decide. The time frame does not usually help but an agent who follows up on a regular basis may get them moving (then again some banks just don't move). In the meantime the buyer is in limbo and that is frustrating. If you put a timeframe on the offer at least you maight feel ready to move on after that point and it may put a fire under the offer you have pending with them.
1 vote Thank Flag Link Mon Apr 13, 2009
No, a deadline won't help speed things up. There are many reasons for the delay, and they vary bank to bank and case to case. If there is more than one loan, you're in for a very long wait.

In many areas it is a declining market, you could make it to approval and then find you can't get loan approval because it won't appraise. Short sales are very difficult for buyers... I am surprised buyers do it at all.
1 vote Thank Flag Link Sun Apr 12, 2009
Hi Donna,

This is the 64,000 question. We placed our bid in Jan and at the begining of Feb the bank send a letter indicating that the short sale packet was completed and we should hear word within 30 days with closing to be 10 days after acceptance (we anticipated closing somewhere mid to late March). Well in April the bank notified all that they had really not even looked at the offer and it would be at least 2 to 3 more months till they even responded and "don't bother to call us, we will notify you when it is completed" as they are swamped with short sales... Needless to say we got out of this deal and found a home (not short) and will be closing the begining of May....
1 vote Thank Flag Link Sun Apr 12, 2009
Short Sales are very difficult to "figure out". With all the problems in the banker industry, these have taken the brunt of the blows. There is no rhyme or reason to the time it takes to close one...I had one close in less than 30 days, another that took almost a year. (Maybe the government can bail them out again).
0 votes Thank Flag Link Fri Aug 3, 2012
What is a short sale? I see a few in my area with nice looking homes for decent prices.
0 votes Thank Flag Link Fri Aug 3, 2012
A "short" sale is when the owner has fallen behind on payments but yet to the point of starting the Foreclosure process. They decide to apply for a "Short Sale" in which the home is put on the market at a lower value of the loan, thus the bank will be 'shorted' the amount that is owed to it. The process is actually very time consuming so the term is misleading non-realty professionals.
Flag Fri Aug 3, 2012
Donna:
The short answer is that no one was prepared to handle this volume and the banks did and will not hire specialists in loss mitigation. There have been no governmental guidelines until recently, which will become effective in March/April 2010.

Currently each time an agent inquires about the property they are directed to whomever is available to answer the phone. It's difficult to develop a repoire with someone at the first contact, but not impossible.

We all hope the guidelines will specifically speed up the transaction time and I have often wondering if an above asking price were submitted that an answer would be produced quicker.
0 votes Thank Flag Link Wed Feb 10, 2010
Hi Donna,

There are many possible reasons for a delay or a long wait, some of them have already been mentioned. The main one is probably they are swamped with files. There are so many variables. It is a process and every step of the way there can be miscommunications that is why it is very important that the listing agent is all over the process. When you submit the short-sale package, it has to be complete, then in some cases it can take up to 2 weeks for the file to be acknowledged by the bank. If any of the required documents are missing, it will be rejected by the bank and the offer and the process has to start all over again. The listing agent has to follow up with a phone-call after faxing the package out to make sure it is received. Just because it was faxed out does not mean they have it. Next phone calls have to be consistant until it gets assigned to a short-sale negotiator. They then have to review and negotiate or approve and process. I have had great success with short-sales and once a negotiator is assigned, the main thing is the communication. If someone is just waiting to hear something without aggressively contacting the bank, it is definitely going to take longer. Contact the listing agent and find out where in the process you are. I hope it is a good deal for you. If it is, it is worth the wait.
0 votes Thank Flag Link Thu Nov 26, 2009
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