How long does a short sale take? Depends on these 11 variables

Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

I’m often asked by clients and by other Realtors “How long does a short sale take?” I would like to give a concise answer, but alas, there isn’t a reliable one. The concise answer is too broad; “3 weeks to 3 years, depending on variables.”

(1) Who’s backing the loan?

FHA, VA, FNMA, Freddie Mac? They all have their different timelines and flaming hoops to jump through. Those flaming hoops eat up calendar time.

(2) Does the lender we’re negotiating with own the loan?

Does the lender own the loan or are they servicing it for someone else, like a pension fund or a foreign bank? If they’re servicing the loan, the servicer can run you through the ringer for months. Only when it passes their test do they forward the package to the investor, i.e. the actual owner of the loan. The investor has the power and authority to reject the short sale or counter offer with unfulfillable demands.

(3) Is there one loan or two?

This is a major time consumer, both on the calendar time and demand of the Realtor’s workload negotiating the short sale. The first mortgage company controls how much the second mortgage gets, the second mortgage often makes high demands that motivate the first to wipe them out in a foreclosure.

(4) Is there mortgage insurance on the loan?

Sometimes called MI or PMI, stands for mortgage insurance. The lender may have insurance that reimburses them for losses in a short sale or foreclosure. Since the MI company is bearing the loss, they often step in and override the lender’s negotiations. The MI can counteroffer with unfulfillable demands causing the wheel to come off the short sale wagon.

(5) Is the borrower eligible for HAFA?

HAFA, or Home Affordable Foreclosure Alternatives, is a program that many lenders in cooperation with the government put in place to provide incentives to borrowers to do a short sale rather than let the house slide all the way to the foreclosure sale. But, you guessed it, it adds complexity, paperwork and calendar time.

(6) Are there other junior liens that attached to the house?

Are there home owner association liens, city liens, sewer line liens, consumer debt judgments, business debt liens, local, state or federal tax liens, child support liens and the list goes on. All these liens need to be negotiated in the short sale process, adding more calendar time and workload time.

(7) Is the borrower in bankruptcy?

If the borrower is in bankruptcy, yup, it adds much calendar time to the short sale process. The bankruptcy court and the bankruptcy trustee have to approve the sale of the house under the terms and conditions of the short sale agreement obtained from the lender. Could easily add 3 to 5 weeks to the calendar time.

Other contributing factors:

(8) Are the sellers in divorce or post-divorce? Are there lawyers and mediators that have to fight over everything?

(9) Are there title problems regarding ownership or unreleased liens that should have been released?

(10) Have the sellers gone AWOL? Have overwhelming life events put the short sale effort on back burner?

(11) Did the lender suddenly sell the loan, or transfer negotiation duties to a collection company?

So how long does it take to get short sale approval? It depends on all of the above!

The most important thing to do, is put a knowledgeable, dedicated, experienced short sale Realtor on your side. In the Louisville, KY area, call Dave Halpern, Realtor, from Louisville Short Sale Expert Realtors (502) 664-7827

Readers are encouraged to add comments with other delays they have encountered.

Posted by



Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East


(502) 664-7827



View Dave Halpern's profile on LinkedIndave_halpern twitterhalperndave_facebookDave Halpern QR CodeLouisville Foreclosure Realtors Dave Halpern

Comments (44)

Lori Mode
The Mode Real Estate Group - Elk Grove, CA
Real Estate Made Simple

Dave - I am asked this same question at least 4 or 5 times a day!  We have been closing a lot of short sales and you are right....3 weeks to 3 years!  Haven't had one take 3 years, but I have closed them in as early as 30 days and as long as 1 year!  The listing agent's knowledge of the short sale process is also crucial.

Mar 13, 2011 05:10 AM
Andrew Martin
REMAX Accord - San Ramon, CA

Dave, great list.  But I think you forgot the most important item of all and that is   Does the listing agent have a clue what their doing? In my opinion, that can make or break a short sale. If the agent just shoved a sign in the ground, and then turned the whole deal over to a 3rd party negotiator, I run away. It's (in my opinion) going to be a disaster.

Mar 13, 2011 06:45 AM
Aaron Vaughn, REALTOR© 830-358-0455
eXp Realty - Canyon Lake, TX
My knowledge is your power | eXp Realty

Dve, this is a terrific post with very specific and detailed information that is true in virtually all markets when it comes to short sales. NICE JOB!

Mar 13, 2011 06:48 AM
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Great list -- also, the seller has to approve it, as the lender may demand a partial repayment, that may or may not be agreed to by the seller.

Mar 13, 2011 07:03 AM
Barb Van Stensel
Chicago, IL

Dave, great post and the comments are extremely helpful as well.

Mar 13, 2011 07:41 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Most excellent blog about the varibles!!  And #30 Elizabeth's comments add too.  Which brings up a lot of issues with the cancallation.  If the premiums were paid . . . and they accepted the premiums how can they do that?  Very good post, and thank you!! 

Mar 13, 2011 07:54 AM
Christian Bastian
Douglas Elliman Real Estate - Sayville, NY
Christian Bastian - Douglas Elliman Real Estate

Great post! I spent a few hours with a first time home buyer yesterday interested in buying short sale property and essentially told them to be patient and know that dissapointment can come at any time. Your post has given me some of the specifics that will furhter help them understand what and why things happen through the short sale process.

Mar 13, 2011 08:45 AM
Thomas Staples
La Rosa Realty - Ocoee, FL
(407) 476-4993
Great idea to document all of the variables. A short sale has many different programs and all can go in many directions.
Mar 13, 2011 09:22 AM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Thanks everybody for your quality comments. I join Barb #29 and Carla #30 in saying that the comments enhance the post.

Mar 13, 2011 09:30 AM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


Good Heavens!  Seeing your list makes me want to run from a short sale.  I guess its best to know all things one may have to deal with in a short sale.  Thanks for the comprehensive list.

Mar 13, 2011 12:24 PM
Linda Lipscomb
Linda Lipscomb RE/MAX Lexington Henderson County TN - Lexington, TN
731-695-1118, Lexington TN Homes

Run Forest Run!!!  My batting average is 2 out 20.  Yuck!  I seem to get the negotiator who is overworked, has tons of personal problems, or months of vacation. 

Mar 13, 2011 01:34 PM
Brenda Noffert
Realty world Alliance - Wichita, KS

Dave (and everyone else)

Great post and comments! 

Explaining these factors (and the others mentioned) to Buyer's agents and sellers is sometimes like singing to a turnip.

About 7 years ago when i started doing short sales regularly, I said that comparing a regular "equity" sale to a short sale is like comparing apples and monkeys.  In the last three years, I compare short sales to Monkeys juggling apples.  It's worth doing for the entertainment, but you can bet its going to be messy and ultimately, the monkeys just sit in the corner and eat the apples anyway. 

I am twisted, but I still love the short sale deal.  Thank you for the great post!


Mar 13, 2011 04:29 PM
Jane A. Knight

Thanks for the tips!  I also read that after two years, you can re-apply for a loan and buy a house after foreclosure. I am wondering if this is true. What is your opinion on doing so? I also hear it can be a good time to buy because there can be more government assistance and lower rates at this stage. Below is the site I have been sourcing for this info. Looking for a second opinion. Thanks! — Jane

Mar 13, 2011 04:42 PM
Nick Dailey
RE/MAX Affiliates - Union, KY
RE/MAX: Northern Kentucky Real Estate - NKY MLS - Short Sale

Good points Dave!  Lots of factors go into being successful in this niche

Mar 14, 2011 04:21 AM
John Bell
West USA Realtym - 4505 E. Chandler Blvd, Suite 200, Phoenix - Phoenix, AZ
Realtor, CRS, CDPE, GRI

I saw this post on Active Rain's Twitter and it caught my attention.  This is great info.  I feel like we are in the "wild west" when negotiating short sales!  The rules, negotiators and requirements are always changing mid transaction.   I have found the majority of loans with mortgage insurance deny the the short sale and the sellers end up being foreclosed upon. 

Mar 14, 2011 06:36 AM
Yolanda Hoversten
Self Employed - O'Fallon, IL
Referrals for O’Fallon, IL & the Metro East

Great tutorial, Dave.  It helps the buyers and the agents, as well.

Mar 14, 2011 09:01 AM
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Isn't the short answer:  "It takes too long."  Great informative post!  Congrats on the Feature!!

Mar 15, 2011 09:41 AM
Elizabeth Byrne
Keller Williams Realty - Arlington, VA
Arlington Virginia Real Estate

Dave, lots of great information. There are so many issues involved in short sales. I do believe short sales should be handled by full time short sales specialists. Just trying to figure out who to call at the bank to get an update is a challenge. Great feature.

Mar 16, 2011 06:19 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Short sales are like fingerprints - no two are alike!  Hats off to all of you who list and successfully close them - I have respect for the ethical ones like you Dave!

Mar 16, 2011 01:10 PM
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo

Well sometimes i dont know what to think of short sales. They are getting better and then they are not!

Aug 12, 2011 04:22 AM