The length of time a short sale approval will take is difficult to guess. Here are some estimate, but every lender and every deal is different.
Lenders often find themselves in a tight spot when borrowers default on payments leading often to a foreclosure, or those whose payments are delayed due to various reasons. The approval process in such cases gets delayed and it is not unusual to find bottlenecks along the way, leading to backlogs extending for days, weeks and in some cases, even months at a time.
The short sale process is long and tedious, requiring a detailed set of regulations to be followed:
1. At the outset, the homeowner has to be approached to get details about all the available documents that would have to be procured and sent to the bank. The time required for this is seldom more than two days.
2. Next is the preparation of lists about how to get the home ready to be listed for sale. It also requires an appointment with the homeowner to visit the home to get a first hand picture about the property. This is also a quick survey taking just a few days.
3. The third stage begins when the estate agent begins to start marketing the place for selling, getting in touch with prospective buyers, advertising, and closing in one serious buyer. This could take anything from a few days to many months. Agencies generally begin to get queries within three to six weeks of the listing.
4. This is followed by the presentation that has to be made to the bank about the offer. It is here that the realtor's expertise in handling and negotiating a short sale comes useful. With prior experience many realtors are able to complete the negotiations in as little as 2-4 weeks, but sometimes, a small oversight may drag the process to several months. But an average number of 30-120 days can be taken from the date of the offer sent to the lender to the time of short sale approval. This period entails several phone calls, faxes and mails between the realtor/negotiator and the lender.
5. Finally, the short sale approval from the bank in hand, it is time for the buyer to shut the home and move out. Most are ready with previous planning and are able to do so in 30 days.
Short sales are not meant just for payment defaulters, as is commonly believed to be true for all foreclosed homes. Even those who have never defaulted on a single installment can make a short sale, due to the negative equity that they have for the present. It becomes easy to short sell the house and get out of the tight financial situation.
Your total short sale could take between 2 months to 1 year. I have personally closed one in 2 months and another that took 1 year, along with several others.