Once an offer is accepted on a short sale, how fast can Escrow be? or how long can it take?

Asked by Eaamon Sullivan , Bakersfield, CA Tue Sep 23, 2008

Help the community by answering this question:

+ web reference
Web reference:

Answers

7
Bill Eckler, Agent, Venice, FL
Sat Sep 27, 2008
Thomas,

With a short sale you can depend on every aspect of the transaction to be painfully slow. It's a long haul that will hopefully work out for you.

good luck
1 vote
Scott Godzyk, Agent, Manchester, NH
Sat Sep 27, 2008
the average is 3 to 6 months. you need to ask how far along they are in the process. fiirst teh seller has to fill out finacials to even be approved for a short sale, then the bank will order an appraisal to garner what the value is, the listing broker will fill out a net sheet that shows teh bank how much they will receive. the bank will have to get at least 80% of what the seller owes in most cases. they weigh what they will get if they foreclose as opposed to what they will receive in the short sale. the listing broker needs daily contact to see if they need anything. good luck
Web Reference:  http://www.ScottSellsNH.com
1 vote
Doreen K. La…, Agent, Bakersfield, CA
Sat Sep 27, 2008
Dear Thomas,

The average is 3 months, but may take as long as 5 months. The words "Short Sale", does not mean quick escrow. It can be very frustrating, so patience is the secret. It is important to understand the bank is in control, not the Seller. The bank must first approve the Seller that they qualify for a short sale, which means they do have a legitamite hardship and no tangible assets to pay the lender off in full! The lender is agreeing to take a reduction in payoff to help close the escrow.

The important thing to understand is that when your offer is presented, you do not have a negotiated contract until the bank approves both the Seller and your offer and you have complete signatures from the bank. Do not order home inpections or appraisals until you have the complete approval, and protect yourself by stating in the offer you will not complete inspections or pay for the appraisal til after the bank negotiates and accepts your offer. This way you will not spend any extra dollars that the bank will not reimburse if they do not negotiate or agree to the short sale. Also keep in mind even if the bank may agree to a short sale and you proceed ahead. The bank at anytime can change their mind and decide to go ahead with the full foreclosure. The deal is not done til it closes escrow.

Your deposit check will not be cashed until you have a completly executed contract and they open escrow. So if the the waiting period is taking too long, and you happen to find another home, you can typically cancel the offer made and move on to the next situation. Once you open escrow, then you cannot just get your deposit back, you would have to have a formal cancelation from the title company signed by both parties for them to release the deposit back to you.

Good luck on your house hunting!

Doreen K. Lane
Realtor, GRI
1 vote
Erica Muller, Agent, Winter Garden, FL
Wed Sep 24, 2008
Thomas,

I reccomend reading my blog post that I wrote on the "escrow deposit on a short sale."

Whatever you do, never put an offer on a short sale without leaving yourself an out clause in the contract. You dont want to get tied up for longer than four months waiting around for the bank to say yes and maybe even no. Tell your agent to put a clause in the contract that states, if the response time on your offer from the bank takes longer than (what ever lenth of time you think is fair to wait, usually three months) than you are released from contract and your escrow deposit is to be returned back to you.

If you do not protect yourself on this you could potentially be tied up as long as six months and so will your deposit. I'm not joking. I have seen short sales go as long as six months and clients find something better in the meantime but can't buy it because their money is tied up in the short sale. Good luck on this. Be patient and protect yourself.

Erica Muller
1 vote
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Wed Sep 24, 2008
Thomas:

That really depends on who accepted the offer. Once the Seller accepts your offer, then it must go to the lender for approval. This can take 30 - 90 days, depending on the lender, whether there is more than one lender to negotiate with, how good the short sale submittal package is, how overburdened the negotiator is, etc. Once the bank has accepted the offer, you can usually close immediately, if you are ready.

In short sales, patience is key. This is not a "short" process. The bank has to take less than what is owed and before they can do this, they have to justify it to their investors. So, hang in there, have your agent call the listing agent on a regular basis for updates, and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
1 vote
Get-smart, , Durham, NC
Tue Jan 18, 2011
Once a short sale is accepted you can set up escrow at the time of accepted or right before you thing a lender will accept it. Escrow is simply an account that your attorney gets together for you. If your attorney takes longer than one day to set up escrow, find another attorney.
0 votes
Eaamon Sulli…, Home Buyer, Bakersfield, CA
Sun Oct 5, 2008
Thank you for your input. Very helpful. Once the offer is accepted. How long does escrow take to close?
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more