How Long Does It Take To Do A Short Sale

Thursday, April 2nd, 2009 at 4:19 pm

Although response times on short sale offers vary from lender to lender, it can take two weeks or as long as 90 days to receive an approval. This is why it’s critical that buyers and their representatives understand and accept that time frame before they make an offer. Clearly, in today’s market, there are great deals on short sale properties, you must now be very clear with buyers about how long they may be waiting. Not all buyers will have that open ended timeframe to wait.

Once the offer is received, it is reviewed by a loss mitigation specialist. After they review the paperwork an appraisal will be ordered to determine a fair market value of the home. After the appraisal the owner will need to provide more documentation to prove hardship and their ability to contribute to the loss. This time frame can fluctuate based on how quickly the homeowner complies with the lender’s requests. Next investors like Fannie Mae and Freddie Mac and insurers like FHA and VA will be reviewing it to see if it can be approved before it can proceed. This may include a list of investors who own pieces of the laon. In this case each investor must sign off on the short sale. You can imagine these investors aren’t very happy about taking a loss so don’t expect them to go out of their way to approve your short sale. Once we have the approval we are just waiting for closing.

To expedite the process, be sure to include all of the required documents in your original offer. Leaving items out will only draw out the process. The file will sit abandoned until all the documents are received. This is the number one reason short sales are not moving quickly. Another part of the problem banks are facing is lack of man power. They were not and are not prepared for the overwhelming amount short sale requests

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