Short Sale time frame

Asked by Ned Home, California Sun May 9, 2010

I heard short sales are starting to get processed faster however I've also heard people are still waiting after months when their offer has been accepted. Please explain.

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7
Kamal Randha…, Agent, El Sobrante, CA
Mon May 10, 2010
BEST ANSWER
Hello Ned,

Currently, even thought the process is getting a bit more streamline, banks like BofA and Countrywide are now using software systems to process faster, ..sometimes it can still take up to several months. You are already too late for the tax credit so I suggest if you find a home you like, put a bid on it and keep looking. Good luck :)

Kamal Randhawa
Broker
510-932-1066
1 vote
Scott Godzyk, Agent, Manchester, NH
Mon May 10, 2010
Not all banks use the same systems to process their short sales. The average time frame is still 3 to 6 months for teh whole process. There are 2 basic flaws with short sales. The short sale will only going as easy and well as the person handling them is expereinced in short sales as their process. Starting with teh asking price, most banks will not discount the mortgage more than 80% because if they foreclsoe, the pmi companies will pay off and the banks wont lose as much as in a short sale. So the price needs to be at what market value is. Next the seller has to be quailified to complete a short sale, they have to be behind in their mortgage in most cases and have a real hardship, "my house is worth $200k and i owe $250k is not a hardship in the banks eyes. cNext all paperwork needs to be submitted together, in full an dfilled out correctly with everything they asked for. This is where the biggest delays come in is paperwork is filed, the processor rejects it as not complete and it sits until someone, usually one of the agents notices it has been a long time and no one has heard anything, while in reality nothing got done except wasted time. Lastly the owner needs to stay in their home and continue to maintain said home, if they move out the chances of a short sale get cut in half.
Web Reference:  http://www.ScottSellsNH.com
1 vote
Stephanie Mc…, Agent, Canton, GA
Mon May 10, 2010
The time that it takes to go from offer to closing on a "potential" short sale is determined by many factors, all of which will be out of the buyer's control. Does the seller have a hardship that would make him eligible for a short sale? Which bank is it - this can make a BIG difference in how long the process takes. Was the house listed at market value and is the offer close to market value? Banks have little incentive to sell for anything less than market value - kind of makes short sales no better of a "deal" than any other house - they are all supposed to sell for market value right!
Your particular situation may dictate whether or not you are even a buyer who is able to delve into a potential short sale - notice how I keep saying "potential"? That's because banks are not approving short sales when listed - they won't even look at the file to consider short sale until an offer is in hand, no matter what it says in the listing.
Hope you've been able to get a better perspective here and good luck with our purchase.
0 votes
Dave Sutton, Agent, Portland, OR
Mon May 10, 2010
Real World.
I closed a short sale 4/31/10 from an offer made on 12/26/09.
I still have not closed a short sale from an offer made 1/26/10. We hope for next week.
My experience with Wachovia matches what others have said.
0 votes
April Dunn, Agent, Edwardsville, IL
Mon May 10, 2010
I would say that if you aren't prepared for the home buying process to take about 3 months, steer clear of short sales. As mentioned by the others in this post, things have gotten better, they are still far from a guaranteed quick process and you should be prepared for the 'worst case scenario'.
0 votes
Christy Brock, Agent, Alameda, CA
Sun May 9, 2010
It depends on the lender and the type of short sale. If the bank is Wachovia, it will take about a week for the approval. If it is a HAFA short sale, it will take about 30 days. If it is neither of these, it usually takes about 3 months. A few banks still have horrible turn times but most fit in these paramerters!
0 votes
Patrick Thies, Agent, Anytown, IL
Sun May 9, 2010
The short sales are getting a little better, but not much. They still can take about 3 months and sometimes more. New guidelines have been put into place to improve the process, but have not yet taken off.

Short sales can have a number of issues surrounding them. There could be second liens, back taxes, etc. These things all need to be address and satisfied before the request for short sale can be approved. The less issues involved the faster it can be processed. However, the number of short sale requests can still bog down the system and take time for approvals.
0 votes
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