How long short sale process

It can take several weeks, or even months, to get a short sale approved. Many lenders have several layers of management, insurers, and investors that will have to be satisfied before a short sale is approved. As a homeowner, it is important to be patient during this long process. It is also critical that you work with a short sale negotiator who is familiar with the various requirements of individual lenders to ensure that the process moves as quickly as possible.

Maybe, maybe not. Just starting a short sale will not automatically stop a foreclosure. However, many times a lender can be convinced to postpone the foreclosure to let a short sale negotiation take place. So, while there are no guarantees, it does not hurt to try. No, there is no guarantee that this will work. Once you fall behind on your loan, the lender can proceed to foreclosure if they choose to.

But typically, lenders prefer not to foreclose and, if effectively presented with smart alternatives, they will often agree to a short sale rather than foreclose. Each mortgage can be negotiated individually. However, multiple mortgages make a short sale more complicated and time-consuming. Not only do you need the cooperation of the first lender, the second mortgage holder needs to agree to a short sale as well.

A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied. The advantage of a release is it allows the property to be sold and helps you avoid a foreclosure.

The disadvantage is the remaining debt on the property sometimes called a deficiency still exists. You are still liable for the note.

In this situation, the only option is generally to switch loan types or pay cash. In northern parts of the country, you might also run into a special variation on this problem. If the house has been vacant and winterized, some lenders will need it to be de-winterized before the inspection can be completed. In this situation, the buyer typically has to cough up the cash. Mortgages are complex processes that involve a lot of paperwork.

Sometimes even a standard mortgage can take a while. However, there are some quirks along the way that you might want to keep in mind. Quick note before we get started: the timeline laid out here is very general.

Your timeline—and even the order in which you hit these milestones—could be very different. The only exceptions? Listings that have been pre-approved by the bank. These are less common, but they are out there and are typically quicker to close. Depending on your loan type, you might be able to close in as little as 30 days, though renovation loans and some government loans will take longer.

Send your short sale packet to the lender and wait for approval: 1 week—12 months. Then you negotiate with them and wait on approval. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors.

Table of Contents Expand. Table of Contents. Defining a Short Sale. The Typical Process. Basics for the Seller. Seller's Package. Writing an Offer. Timeliness From the Bank. Some Final Tips. By Elizabeth Weintraub. Learn about our editorial policies. Key Takeaways A short sale means that the lender has agreed to sell the property for less than the outstanding mortgage balance against it.

With a short sale, there's typically a certain process that both the bank and the seller go through. If you want to buy a short sale, try to write an offer that's as close to the amount owed as possible. The process can be frustrating—agents may need to reassure the buyer and seller that patience is necessary. Article Sources. Your Privacy Rights. You might ask your agent to check out the short sale listing agent's track record as well. A poor short sale closing record on the listing agent's part usually means your chances of getting an approval are slim.

The listing agent might refuse to reveal the offer prices, but they should disclose how many offers have been received. You might have to offer more than the listing price if multiple short-sale offers are on the property.

Find out if the seller's short sale package is complete. Bank negotiators will not process a file if it's missing the required paperwork. The file will probably take longer to close if more than one lender is involved. Some junior lenders might demand unsecured promissory notes from the seller or more money than usual from the first lender.

Other lenders will also only consider the first offer. If you're not the first, your offer might fall by the wayside. What is "normal" for the waiting period depends on the bank. Some banks get approvals in less than 30 days, while other banks' short sales can sometimes turn around in 24 hours.

On the opposite side of the spectrum are other lenders so swamped with short sale submissions, their employees may not respond promptly. The process is generally as follows after submission of the offer and a complete short sale package from the seller:. Some short sales require additional levels of approval. If a government entity is involved, you should add a couple of weeks to your short sale approval expectations. The process can be slowed if the loan has mortgage insurance that the borrower didn't add.

If you're running past days, it's possible that the listing agent or a third-party negotiator is not on the ball and is lax about calling the bank. Calling the bank often means waiting on hold for anywhere from 10 minutes to an hour or longer—not something anyone would look forward to multiple times.