Profile picture for Lucky Seven

How long due short - sales usually take? Are offers turned down alot buy the bank?

  • May 09 2009 - Nashville
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (13)

Best Answer

Dear Help Wanted:  A short sale will typically take anywhere from 45 to 120 days.  In the beginning when short sales started off, you could close in about 60 days.  Since the market of foreclosures has drastically increased, many more homes have gone to short sale status.  Due to such a substantive increase, it is now taking the lender's longer to close.  The Buyer must be educated that a short sale is a game of patience. Once the Listing agent submits all the necessary documentation to the bank, everyone needs to wait.  It is helpful if the Listing agent is familiar with short sales since it does take a tremendous amount of energy to consistently stay on top of the lender.  Once documents are sent to the lender, they will process the papers and order an appraisal and/or BPO (Broker Price Opinion). This is their foundation to determine if the contract price submitted is inline with current market sold trends.  For the most part, if a contract comes in within 20% of the balance owed on the mortgage, the banks will tend to accept the offer.  However, they can (and have) come back with either a counteroffer or outright rejection, meaning the process starts all over again.  Again, all parties need to understand that they will have to exercise great patience.    Hope this helps.
  • May 09 2009
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Get your CDPE!
  • November 30 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Connie Klemme
sunnyview- that's a priceless post.
wish i could give you more than one thumbs up.

:)

here's my answer about short sales
it's actually about short sales so if you're looking for witty remarks...sorry to disappoint.
  • November 30 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

The length of a short sale will vary greatly depending on a number of factors. You need to find out whether there is just one loan on the property or multiple loans (i.e. line of equity). Also, if the short sale is being handled by an experienced short sale attorney or an agent experienced in dealing with short sales, the chances of the process being faster are great. Some agents try and handle short sales themselves, and this can delay the process if they don't have much experience. 

As far as offers being turned down, I have never experienced that and have worked with a lot of buyers purchasing short sales. I have had a lot of offers flat out accepted, but sometimes the bank will counter-offer back. I've experience a lot recently where the bank will counter-offer back at a higher price and the buyer can either decide to accept that price (most likely still an excellent deal since they are priced below market value anyways) or sometimes buyers decide to walk away from the deal. 

Basically, be prepared to wait at least 2-3 months, though, if not longer.
  • November 30 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
In this case, you would probably get an answer on a short sale faster than a reply from Mr. Pacchiano. 2009 was a great year let's take look at the Grammy winners here. Viva La Vida.
  • November 30 2011
  • 3Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for NY Broker

could take 4-6 months to get an answer from the bank, sometimes longer

  • November 30 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I don't know why some folks are strong against the short sale. I've never run into issues - other than getting my full contract commission that is!


[content removed by moderator]
  • November 23 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for lslifka
On the positive side...we recently purchased a "short sale" home...7 weeks from offer to close and got a 3 yr old home and really the home of our dreams for 1/2 the price the previous owners paid when they built it.  It was all in our timing...the house had been listed for about 6 months at a much higher price, but would have gone into foreclosure one week after our closing date, so the bank was motivated to get it rid of it when we made our offer!  We had hard time with an offer we made on a short sale home prior to this one so we know it can be rough, but there are success stories out there too!  Good Luck!!
  • May 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for gr14
As a buyer, Short Sales are horrendous, but they are such a large part of the market now that I think 'boycotting' them would only cause the market to sink further into the abyss.  Having properties stand empty and becoming dilapidated only lowers everyone's property values. However, I do agree that having the bank work with the people that currently occupy the home would be in everyone's best interest.  But then common sense went out the window at the beginning of this housing bubble. The choice of bidding on a short sale is, as described, a game of patience.  More importantly it is a game of chance. I found a short sale in a neighborhood that has been apparently badly damaged by the busted bubble and it is now only listed at 61% of the loan value.  The owners of the property have vacated the property and left it move in ready.  They left the electricity and water running so examining the house did not require a flashlight and prayers of good plumbing.  Someone is even mowing the grass.  Since the property was well maintained, and it is obvious the previous occupants worked hard to upgrade this home, I offered the current list price.  However, I opted for a 60 day clause in the short sale addendum to allow me to chuck the deal if the bank does not come back with a speedy reply. Frankly, the current owners are doing as right by the bank as they can by their actions therefore my blame would rest with the mortgage holder if they do not accept this offer.   If they do not, on day 61, I have told my realtor to have a list of current listings for me to view as I will just ‘walk away.'   I really think this is the mentality a buyer has to have when dealing with short sales.  Do not become so attached to the house that walking away is not an option.Tim Honeycutt, NYC 
  • May 09 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for cosmonaut62
Hi! We put in an offer on a short sale on March 16. The original price was 260,00, but it sat on the market for a while, and the asking price when we offered was 209,000. We offered 190,000 since it had been on the market for so long. We got occasional updates that it had been assigned to someone, that things were progressing, etc. We were a little discouraged when we discovered the seller's bank was ASC, which had a pretty bad reputation for taking a loooong time with short sales. However, our realtor called us on April 23 to tell us that the house was ours! We got it for asking price, plus the sellers are covering closing costs. We close on the 14th...this coming Thursday. We are thrilled! We're first time home buyers, a family of five, and we're getting a six year old, 3200 square foot house on 1/3 acre in a lovely neighborhood, on a cul-de-sac.
So, it did take a few weeks, but nothing drastic, and was totally worth the wait. I know that this isn't the case with most short sales, but I did want to share our story and let you know that victory is possible :)
  • May 09 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

My best recommendation:  Don't Do It!

Although response times vary from lender to lender, plan on a minimum of 60 days and as long as 120 days to receive an approval of a short sale from a lender. That's why it's critical that buyers and their representative understand and accept that time frame before they make an offer.

Right now, I'm not showing my Buyer clients any short sales listings (if you Google "short sale nightmare" you'll find 748,000 articles), because they are a nightmare!  No response from the bank or lender and you just sit around and wait and wait and wait.  More often than not, the lender will go ahead and foreclose anyway, losing thousands of dollars and further declining home values.

In the meantime, while you are waiting for a response from the bank, home prices may continue to fall.  You can have an offer accepted on a foreclosure or from a homeowner [yes there are still a few around :-)], close escrow, and be sitting in your new home before you even hear back from the bank on a short sale.

Now, here's the crazy part, if the bank or lender is willing to negotiate a short sale, WHY aren't they offering the this same opportunity to the homeowner?  The assumption being that the homeowner wants to stay in their home and is still employed. 
My recommendation is a TOTAL BOYCOTT of all Short Sales
-- if the listing agents would refuse to list them and the buying agents would refuse to show them, then the lenders would be forced to negotiate with the homeowner directly.  If the lenders and banks would negotiate directly with the homeowner it would cut out the realtor and real estate commissions as well, so more money could be saved.
  • May 09 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for dmkhern
So if the current owner owes, for example, $900k on the loan but the house is worth only $550k, you say the bank will accept the offer if within 20% of the balance owed? That's $720k - no lending institution will give you a loan for $720k when their appraisal (and in all likelihood the mortgagor's BPO) come in at around $550k. I thought the 20% figure came in play if the offer was within 20% of current market value/BPO, since proceeding with a foreclosure would end up being more costly. Can you or anyone else clarify?

Has anyone seen the bank counter for more than the BPO/Appraisal?
  • May 09 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Help Wanted,

Having gone through more than a few of these on both sides, the most accurate answer is "typically" 2-3 months from beginning to end.  If you could just get the bank to not drag its feet, then things could progress much more quickly.  The fact is that the bank really doesn't make any one property a priority.  I can assure though, that no matter what offer you make and is accepted by the buyer in a short sale, the bank will almost always come back and ask for more $$ or ask you to submit your "best, final offer" to try and maximize their return.  And, even after the bank agrees to accept your offer, after the seller does, you still then have to go through the inspection process, get the financing done, etc. before closing.  If you're patient, you can get a really good deal....but the sitting around waiting for the bank to act can be frustrating.  I hope this helps.  If you have any further questions, you can visit www.mvpcolorado.com  and shoot me an email or call.  It doesn't matter if it's Tennessee, Colorado or New York....banks will take their time.  Especially now that there are so many short sales and forclosures on the market.
  • May 09 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.