HOW LONG SHOULD WE WAIT FOR A SHORTSALE APPROVAL?

By
Real Estate Agent with THE KEYES COMPANY

Short sale buyers across the country are singing the blues right along with you. Every short sale is different and as much depends on the lender as it does on the listing agent. Some listing agents outsource their short sale negotiations to a third party, which can often delay a response.you can get desperate,buyers may walk a way and frustration can rise but if you disclose properly and your buyer is willing to wait and you want to follow through it can be a sale ..it is just a matter of time.

This will be the test that will not only prove how patient your are but it certaInly will TEACH you to FOLLOW UP...A VERY IMPORTANT SKILL IN THIS BUSINESS !

It gets difficult and frustrating and it seems you will never close a shortsale.Do not get discourage but do what ever it takes! I do alot  of research and find out what other people in my area is doing, lots of follow up and I even contact banks...the truth is that most of our market is of shortsales and if there are some REOS each has 6 to 14 to 30 offers ..outrageous isn't it ..this is what is happening in MIAMI and Iam sure in many other cities.

I sometimes wonder what it will take for some of us to learn from all these bad experiences in the past ...some are so greedy that they want to make as much money as they can  putting their licenses at risk,playing with people's time ,money and gas . Some agents  have listings marked available on the MLS ,I even call the listing office before taking a customer out..and still make us drive around like crazy and once you find something for your client to your surprise when you are ready to present the offer , it  has a contract pending ,they submitted the offers but they are waiting for addendums or they have tons of offers per house.

It is unfair and unconsidered not only for our clients first but for the rest of us professionals in this business. How are we supposed to earn credibility,trust and the respect of the public ?

Nobody wants to get anybody in trouble but as much as you make an effort  you encounter with agents with total disregard and consideration . Some BROKERS are not helpful and do not even respond to the offers or let you know whats going . Some do not even present your offer ....We ought to do something more drastic, present our cases to the NAR or the local Association of Realtors to put and stop to the deceive and the bad business of many brokerage offices. We have make not only authorities aware of this games but we have to create some consciousness also in banks not only to be asking for bail out money but to hurry up and be part of that economic recovery .Some agents are writing directly to CEO and they are getting quick responses.

The following are some tip of how to deal with shortsales based on experience but the best way is not to pay this small shortsale companies that do a loussy job ,get a realestate lawyer that work directly with the bank. 

Qualify Your Short Sale Before Writing the Offer

Before you decide to buy a short sale home, ask your agent to do a little groundwork first. Some of the things your agent might do are:

 

  • Examine the Comparable Sales

    Many banks will discount the price a little bit from market value, but to get an acceptance, offers should be reasonable and close to the comparable sales.

     

  • Check Out the Short Sale Listing Agent's Track Record

    If the short sale listing agent has very few short sale listings and has little experience actually closing a short sale, your chances of offer acceptance may be slim.

     

  • Ask How Many Short Sale Offers Have Been Submitted

    While the listing agent may refuse to disclose the offer prices, the agent should let your agent know how many offers have been received. If there are multiple short sale offers, you may need to offer more than list price.

     

  • Find Out if the Sellers' Short Sale Package is Complete

    Bank negotiators will not process a file if the sellers' short sale package is incomplete. That file will go to the bottom of the pile if it's missing paperwork that the bank requires.

     

  • Get the Name and Number of Lenders

    More than one lender might mean the file will take longer to close. Some junior lenders are demanding unsecured prom notes from the seller or more money than usual from the first lender. Also, some lenders will consider only the first offer. If you are not the first offer, your offer may fall by the wayside.

 

How Long Do Short Sales Take?

This is the million-dollar question.  lenders like Citi Mortgage, wanted to see every offer, and we had received a dozen.

Other lenders such as Countrywide are so swamped with short sale submissions that its employees can't respond in timely manner. What once took two months can easily take four months.

The short sale process, from submission to short sale approval, is generally as follows:

 

  • Submission of offer and complete short sale package from the seller.
  • Bank acknowledges receipt -- 10 to 30 days.
  • Bank orders a BPO or appraisal -- 30 to 60 days.
  • File is reviewed -- 30 to 60 days.
  • Negotiator is assigned -- 30 to 60 days.
  • Level II negotiator may be assigned -- 30 to 90 days.
  • File is approved or rejected -- 60 to 120 days.

If you're running past 120 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 means waiting on hold anywhere from 10 minutes to an hour or longer.

Or, a lengthy short sale period can also mean the bank has internal problems, not enough staff or has lost the file a few times, prompting the listing agent to resend the package over and over.

It can also mean that the appraisal is substantially higher than your offer, and the listing agent is building a case for a new appraiser.

Unfortunately, you can't always avoid problems on a short sale. Patience is key. You'll most likely eventually get short sale approval. Threatening to walk away means nothing to the bank. Your best bet is to stick it out and wait, providing you truly want the home.

Comments (1)

Anonymous
Eva Nash

Thank You for Writing This. Helga,

I am on active rain too and I like that foremat.  Facebook well I have never realized so much of what I am looking for until I got there just one week ago.

This page link was recommended on facebook and that is how I arrived here. 

I would like invite you to start a group on facebook fielding questions and answers on this. The world is waiting for your tuteledge. 

I tried to get a discussion group going on my facebook site and I hope you will come by my site and

enter my discussion of "To Be or Not To Be"  referring to short sales..  I personally think nothing will change until banks become more appreciative of the job realtors do. It is unconscienable that we wait so long and some time wait without getting the sale and nothing was done to offer a clue that my contract was not going anywhere.

Thank You,

Eva Nash - Broker

Sep 10, 2009 10:54 AM
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