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Asked by Aaron, Saginaw, MI Sat Jan 31, 2009

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Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Sun Feb 1, 2009

Short sales can be frustrating and often it seems ridiculous that the banks take so long. From my experience, this time period does seem a bit longer than usual, after the bank has countered on price. Your agent should be calling the listing agent for updates at least once a week and making sure that the listing agent is calling the bank. Banks will often close a file after making one attempt to reach the listing agent (where they don't even leave a message) and the only way to know this is if the listing agent calls for status and hears that the file is closed. This may or may not be the case in your situation.

Here are a few reasons why banks take so long in approving short sales:

1. They can. The negotiator usually has a certain number of days (10 - 45 days) to complete the analysis once they have all their information (accepted offer, appraisal, payoff information, etc.) and trust me, they wait right up until the deadline date to do it in most cases. Then, once they are done with the analysis, this is not the end, because . . . . . .
2. Most Short Sale Lenders you are dealing with do not OWN the loan, they only SERVICE it. This means, once they push you to the highest number they can AND complete their analysis, they then have to send it to the OWNER or investor for approval. The investor usually has 30 - 45 days to review the file and get it back with approval, denial, or another counter offer. And there might be one other layer, because . . . .
3. Some loans are also insured. The insurance company has to sign off on the amount being taken, as they are left holding the bag for the balance not paid through the short-sale. Some lenders send the final analysis to the investor and MI company at the same time (parallel processing), other send to one, wait for an answer and then send to the other (serial processing). This can take another 10 - 45 days.

So . . . ., as long as you have verified that the file is still open and in processing all you need is patience. In short-sales, he with the most patience wins.

One other caution, have YOUR agent run new comps. If the value of properties has fallen significantly in your area, you may not appraise at a November purchase price. You need to know this before the bank approves the short sale at the current sales price, just in case you need to negotiate a lower sales price.

Hang in there. Your home is out there waiting for you. You just need patience, perseverance, a great Realtor who fights for you. Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes
Bill Eckler, Agent, Venice, FL
Sun Feb 1, 2009

This is common and your agent is being sincere about being at the mercy of the process. The short sale process can often be extended because of a number of factors that need to be resolved prior to giving you clear title to the property. multiple loans, liens, divorce, etc

Additionally, banks are currently overwhelmed with the volume of activity coming at them. Some short sales close quickly and easily while others can require 4-6 months.

If you have an executed contract with the bank and owner there should be a bank appointed processor involved in the transaction. Our recommendation is to find out who the individual is and begin calling them regularly for progress reports, updates, checking on paper work, etc.

"The squeeky wheel.................."
0 votes
Penny O'Brien, Agent, Las Vegas, NV
Sat Jan 31, 2009
Well,I will tell you from my experience that short sales are the new way of buying a fantastic home for a great price. Las Vegas has been the foreclosure capital and will continue to be for some time... I have many clients who have been buying only foreclosures but we are now working with many more short sales. Short sale properties in general are in better shape. Foreclosures most typically are trashed in some form. Short sales are worth waiting for. I hope you have a facilitor working with your deal.. I only sell short sales using one. they might charge a little to get the deal done but they make it happen. Most charge around $500 or so but it worth it. They have connections with the banks which means they have contacts within. Most agents don't have that kind of realationship with banks. It's possible that you will have a deal.. If you have anymore questions let me know..
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Brett, Both Buyer And Seller, 17316
Sat Jan 31, 2009
This process is a pain, but sometimes can be very profitable. The banks drag their feet and then they wonder why their in the state their in.
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Maria Morton, Agent, Kansas City, MO
Sat Jan 31, 2009
Yes, this is typical when dealing with the banks. Some will take 6 months to get it together. Patience is needed if you intend to do business with them.
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John C "John…, Agent, Grants Pass, OR
Sat Jan 31, 2009
There is no standard way that banks deal with short sales. Your contract is with the seller, but the bank is calling the shots. In my experience here in Southern Oregon is banks will often hold off giving the ok in hopes of getting a better offer. Be prepared to wait. . . .and wait. We have had a number of buyers who finally just got tired of waiting and gave up on the deal. A word of caution; don't expect the seller or the bank to do any repairs, so do your due diligence to be sure you know the condition of what you are buying.

Here is the good side; BANKS DO NOT WANT TO OWN REAL ESTATE, and foreclosure is usually more expensive for a bank than a short sale. They will often hire a different real estate broker to give a BPO (broker price opinion), and if your contract with your seller is close, they may let the sale go through.

My advice: be patient, but find a plan 'B".
0 votes
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