How long will the short sale process take? While all short sales are different, there are some general timelines I give folks when asked. I have had short sales approved in days, years and everything in between, but most Florida short sales will generally last 4-5 months and will usually fall into these some general time frames:
SHORT SALE TIMELINE
Property Marketing: 2-8 weeks
Before your lender will consider the short sale, the property will need to be marketed and a buyer secured. After our initial consultation, the home will go on market and I generally recommend price reductions every 2-3 weeks depending on property activity. The timeline to secure a buyer will have the most variation depending on market conditions and price, but currently my average listing goes under contract within the first month or so.
After a buyer is secured, the real work begins...
Document Review: 1-4 weeks
Your lender will want you to qualify for the short sale, and will do a full financial review. We will provide a list of documentation and forms your lender will require as part of the approval process. It is best to have all this documentation ready up-front to prevent any delays. Most lenders will allow up to 30 days to review the documents and make a decision regarding your ability to qualify financially for the short sale.
Property Valuation: 1-3 weeks
After ALL your paperwork has been received and reviewed and you have been deemed qualified to move forward, your lender will want to get a current value on your home and will order either an appraisal or BPO (Broker’s Price Opinion) from a local real estate agent or appraiser. This valuation will be scheduled, performed and the results will be sent to the lender.
Short Sale Negotiations and Investor Approval: 2-4 weeks
Once this value has been received by the lender, the purchase contract will be weighed against it. The lender will accept, reject or counter the contract. Your lender will determine their “acceptable” fees and timelines. These fees will very often need to be negotiated several times in order to get the net proceeds of the sale to an acceptable level. The terms of the approval letter will be dissected and sometimes renegotiated. Once acceptable terms for all parties have been reached, the investor on your loan will also need to sign off on the approval.
Short Sale Approval to Closing: 4-6 weeks
Once an approval has been successfully negotiated, a short sale approval letter will be issued spelling out the terms of the sale, and your sale will move forward like any other. The buyer will generally need to wrap up their loan, and a closing needs to be scheduled. There will always be a limited time frame to close specified in the short sale approval letter so all parties will want to be prepared to move as quickly as possible to close.
POSSIBLE EXCEPTIONS THAT CAUSE DELAYS:
Multiple Liens: 1-4 weeks per lien
If there are junior lien holders ( second mortgages, other liens), all liens will have to be negotiated and all lien holders will have to be in agreement with each other in order to get the sale to happen. This requires extra time.
Lost Buyer: 2-4 weeks
Unfortunately buyers do not always perform as expected. If a buyer is lost through the process, a new buyer will have to be found. This will also require additional time, but is not necessarily an entire new approval as seller documentation will have already been processed and the valuation will have been performed.
Inaccurate BPO or Appraisal: 2-12 weeks
Once in awhile a BPO/appraisal does not go as expected and needs to be disputed. This can take as little as 2 weeks, or some lenders will require the old BPO to expire, before considering a new one. Most BPO’s expire in 3 months.
Declined short sale: 4-12 weeks
Sometimes lenders unexpectedly decline short sales. Usually the issue is one that is able to be overcome, however this generally requires an entire new short sale approval from the very beginning.
The key to having a smooth and speedy short sale is to take action early, and hire the right help. Minna Reid has been specializing in short sales since 2010.
This past summer we had to do something we never expected and that was to short sale our home of 15 years. Minna answered our phone call and immediately assured us we were not alone in this and she would be there every step of the way. At no time did she ever make us feel less then she assured us this was more common then we knew and she would do everything to get us a sale before the inevitable foreclosure due to loss of income. She and her staff were amazing once we vacated and moved 700 miles away she was able to locate a buyer in just over 3 months and hold the closing with 4 months of the listing date. They were there every time we had a question or to explain the next step. She and her staff are amazing and I would recommend them to anyone looking for a realtor. Words cannot express our gratitude.