Ssssh...Short Sales: Take One - Timelines

By
Real Estate Agent with Seven Gables Real Estate

Let me introduce you to a very misunderstood and often despised Real Estate transaction:  Short-Sales.  Some Realtors run from them, some buyers run TO them, and many homeowners are overwhelmed by them.  Unfortunately, Short-Sales will be here to stay for several years to come, so it is time to get to know them. 

Each homeowner's situation and each Short-Sale transaction have its own nuances and variables.  There may be a playbook but it is rarely followed and it is always being rewritten.  In this series I will break down the components in their simplest forms starting with foreclosure timelines in California.

Foreclosure Timeline:

•·         1 Month late on a payment - Phone starts ringing

•·         3 Months late on a payment - Lender CAN Post a PUBLIC Notice of Default (Posted on property and in newspaper)

•·         6 Months late on a payment - Lender CAN Post a PUBLIC Notice of Auction

•·         7 Months late on a payment - Lender CAN Auction your home (In CA these are done on the county courthouse steps where either a private investor purchases the home or the bank takes it back)

•·         8 Months late on a payment - After your homes has been sold at auction you CAN legally be evicted

You probably noticed the word CAN.  Due to the high volume of non-paying homeowners lenders are frequently slow to react, however, both sellers and buyers need to be aware of the timelines.  If a homeowner is trying to do a loan modification the clock CAN be slowed.  On the other hand, even if a lender approves a short-sale the right hand may not be talking to the left over at the bank and the home CAN be sold at auction.  This doesn't happen very often, but the point is there are no certainties (yet). 

Stay tuned for Take Two. Share the word.

Comments (5)

Margo Currie
Exit 1 Stop Realty - Saint Augustine Beach, FL

I've been involved in a few transactions that were short sales, and I can't say they were pleasant. I just can't understand why it takes so long to get the paperwork once the sale has been approved.

Apr 26, 2010 03:13 PM
Aaron Silverman
SuccessfulRental.com, Bluewater Property Management, LLC and Lowcountry Turnkey Properties, LLC - Charleston, SC
Improving Real Estate Experience through Education

Good timeline.  I recommend clearly stating this applies to California.  Foreclosures vary state to state.  That way you are covered and show your knowledge of your local market.

Apr 26, 2010 03:37 PM
Dan Tabit
Keller Williams Bellevue - Sammamish, WA

Carolynn, Good start to the series.  I've been doing short sale since 2002 and they are not for the faint of heart, buyers or agents.  Patience and commitment are critical components if you hope to be successful. 

Apr 26, 2010 03:44 PM
Carolynn Santaniello
Seven Gables Real Estate - Orange, CA

@Margo You are right, pleasant will probably never be a word used to describe distressed sales.

@Aaron Excellent point.  I added the state.  Thank you!

@Dan What do you find to be the biggest change to SS over the past 8 years?

Apr 26, 2010 04:43 PM
Nicole Thome
USA National Title - Orange, CA

Great post, Carolynn!  Succinct and to the point.  Avoiding short sales is basically avoiding an entire market segment and agents in our next of the woods who avoid them are missing out on a lot of business.  Likewise, agents in our area have been required to jump on the Short Sale Express and learn the 'rules of the game' very very quickly since ... a few years, short sales on the MLS were few and far between.   It hit quickly.  Hopefully, it will go away quickly and we can return to "pleasant" standard sales.  :)

Nicole Thome, USA National Title, Orange County

Jun 10, 2010 11:26 AM