Home Buying in Gold River>Question Details

Susan, Home Buyer in Gold River, CA

Generally, how long does a bank take to respond to a short sale? If they're asking for more documents from

Asked by Susan, Gold River, CA Mon Nov 17, 2008

the seller after three months, does that mean that they're finally getting ready to respond to an offer?

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Hello Susan,
Has the bank ordered an appraisal or (BPO) Broker Price Opinion yet? This is an easy straight forward question to ask your agent. You may have a little way to go if documents are being asked for 3 months after your offer (YIKES) and a BPO still hasn't been completed. Unless this is your dream home you may want to start looking again. Try to stay away from Short Sales in the future. I'm sure in the last 3 months some very good deals have come and gone.
Web Reference: http://www.sacreopro.com
0 votes Thank Flag Link Tue Nov 10, 2009
Excellent synopsis Erin!

If the listing agent has completed the process to where the bank has completed a valuation of the property, (meaning all previous steps were completed), then a response can be given pretty quickly.

I expect that your realtor should have asked very detailed questions of the listing agent as to the stage at which they are at in negotiating this short sale with the bank. With the information listed below, your agent can use that to find out how 'committed' the bank is. If not, I've been known to include an addendum allowing me to stand in to negotiate with the bank to get their commitment to my buyer's offer....

Time will depend on whether this listing is a valid short sale or just a listing agreement between a wishful seller and an inexperienced realtor (on short sales).
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Tue Nov 18, 2008
Hi Susan,

Possibly yes, however it is more likely indicative of an incomplete or outdated file. When banks review short sale files, they usually need all of the following from the seller:
-Last 2 years IRS Tax Returns
-Last 2-3 months of bank statements
-Last 2-3 months of paystubs / P&I if self employed
-Hardship Letter
-Financial Statement (spreadsheet of incoming/outgoing expenses)
-Recent 401k, or other investment account statements

In addition to the above items from the seller, they also need several items from the listing agent, such as:
-Listing Agreement
-Purchase Agreement
-Estimated HUD1
-MLS printout
-Buyer pre-approval letter
-Copy of earnest money deposit check
-Recent sales comparables

In my experience with these types of transactions, the real indicator of an incoming approval is when the BPO (Broker Price Opinion) is ordered, completed, and processed by the bank. For a BPO, the bank may order a full-blown appraisal by a licensed appraiser, or they may send out another local agent to give an independent, unbaised estimate of value to validate the offered price.

Usually, after that step, if all is acceptable and the BPO value is acceptable, the file is recommended for management or investor approval. Depending on the investor (could be Fannie Mae, or the originating bank if the loan is being serviced by another entity), that step could take a few days or a few months. With any luck, the listing agent is in frequent contact with the bank to push this process along. The squeaky wheel gets the grease.

As Julie stated, often times when a bank approves a short sale, they do not give you 30 days to close the escrow. Definitely tighten up your financing scenario, make sure your loan officer has verified your income, assets, downpayment, and credit score. Be prepared to switch loan officers/lenders if necessary to close on time if you are in a pinch - have a plan B.

Good luck to you!
Web Reference: http://www.SacREBlog.com
0 votes Thank Flag Link Mon Nov 17, 2008
Erin Stumpf…, Real Estate Pro in Sacramento, CA
I have been involved in a few short sales in the last several months and on average they have taken 8 to 10 weeks. Once the bank does respond, they want to close the deals very quickly. As a buyer, my recommendation would be to make sure your financing is in place so you are able to close quickly. Banks are very overwhelmed with foreclosures. I truly feel persistence pays. Don't let your offer get lost on someone's desk. I recommend having your agent call every couple of days asking for status updates until you get an answer. 3 months with no response seems pretty long.
0 votes Thank Flag Link Mon Nov 17, 2008
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