How long short sale approval

Trust me. Now, depending on how your agent has guided you through the short sale process — and where the seller already was in their process before you came along as an interested buyer — you may have submitted your offer before now.

In other instances, you may have only discussed numbers and ordered inspections to cover all the bases before writing up a formal offer. This is where it could take potentially months for the bank to review the file and make a decision about whether or not to accept the short sale.

On average, probably five months right now. The same goes for a title review. You can help expedite this by having already completed your inspections and title search before acceptance! Your agent will help you through the closing process in accordance with the bank, and, pending any unforeseen delays, the home should be yours in about a month — congratulations! You made it! Short Sale Process Timeline: Sellers The timeline for selling a home as a short sale varies by state and depends on the actions of the homeowner, the actions of the bank, the various internal processes within the bank, what the difference is between the mortgage value and the value of the home, and other factors.

Approval Timeline The short sale process involves extensive paperwork sent back and forth between the bank and the homeowner. Collection of Documentation: 1 - 3 Weeks Homeowners must prove they qualify for a short sale. Property Valuation: 1 - 3 Weeks The lender will request a property valuation, either from a real estate professional or from an appraiser.

Negotiations: 1 - 3 Weeks Once the homeowner begins turning in offers to the lender, the lender may take several weeks to respond to the home buyer with a counter offer.

Escrow and Close: Up to 6 Weeks In a standard home sale, the escrow process generally takes about four weeks. Exceptions to the Timeline Some factors can complicate the short sale process, causing it to take longer than it would otherwise. Multiple Lien Holders When the homeowner has multiple mortgages on the home, lien holders must get in line to collect money on the balance owed. Lost Buyer Sometimes, buyers lose patience waiting to hear back from the bank. Inaccurate BPO or Appraisal If the broker price opinion BPO or appraisal for the property is inaccurate, then the representatives at the bank may develop an unrealistic expectation for how much they can get by selling the home.

Short Sale Rejection If the lender rejects an offer from a home buyer, then the buyer must make an additional offer, or the homeowner must wait for a new offer from a new buyer, which can add more time. Short Sale Process Timeline: Buyers Buyers and sellers are subjected to a similar timeline throughout the short sale process.

Approval Timeline The process for buying a short sale follows the steps below. Mortgage Approval: Months Receiving a mortgage approval takes most home buyers a couple of months, starting with a pre-qualification and ending with the closing of escrow and the signing of the mortgage documents.

Identify a Home to Buy: 1 Week It takes most potential buyers at least one week to look at online listings, and view a home they would like to buy. Make an Offer: Weeks Making an offer to a homeowner takes a couple of weeks, as the home buyer and homeowner may negotiate before they can agree on a final price. Get Short Sale Approved by Lender: Up to 12 Months A lender can take as long as 12 months to process a short sale package, including an offer from a viable buyer.

Work with an Experienced Real Estate Professional Real estate professionals who have experience with short sales often find it easier to navigate the complex process of selling or purchasing a short sale. Correctly Structure Your Offering Price Lenders want to recover as much money from the sale of the house as possible. Make Offer as Free of Contingencies as Possible Home purchase contingencies can be a road block to having an offer accepted.

Patience Is Key Patience is key when buying or selling a short sale. Post a Comment To post a comment about this blog entry, click here. Related Posts. From Our Blog.

As to the specifics of the delays you might face, they could be caused by any number of things. Your most likely suspects include:. Total Mortgage Processing Coordinator Jake Healy has seen his share of short sales and experienced this first hand. Instead, they package it with other loans and sell it to another company, who will then service the loan and collect payments and interest.

This can happen at any point in the term of the loan. Of course, that also means it can happen during your negotiations, forcing you and the seller to start from scratch with the new bank.

Jake has run into this issue, too. If the seller has run into money troubles, they might have taken out a second mortgage on the property via a home equity line of credit or home equity loan. Every lien or unpaid debt that shows up on the title must be negotiated and settled before the sale can proceed. This can, understandably, take some time. Marc Laudicina, a managing loan officer here at Total Mortgage, has plenty of experience with short sales. This took a while.

These allow you to finance the renovation of your new property along with the original loan. Since they require so much documentation in terms of contractor quotes and plans, though, they can take a lot longer to close. In this situation, the only option is generally to switch loan types or pay cash. Short sales aren't for the novice home seller, and experienced real estate agents are frequently helpful when it comes to conducting them.

Also, buyers wanting to submit a short sale offer need to work to put together a comprehensive offer package to convince the mortgage lender to accept it. Managing short sales takes skill, time and patience on the part of sellers and buyers. Tony Guerra served more than 20 years in the U. He also spent seven years as an airline operations manager. Guerra is a former realtor, real-estate salesperson, associate broker and real-estate education instructor.

He holds a master's degree in management and a bachelor's degree in interdisciplinary studies. By Tony Guerra. Related Articles.