How Long Should it Take for the Bank to Respond to a Short Sale Offer?
For a homeowner facing foreclosure, short sales offer a way out: She finds a buyer for the house, the lender accepts the offer and stops the foreclosure. However, "USA Today" states that many buyers have missed out on good offers because the bank took too long to make a decision. This also hurts lenders as the cost of processing a short sale tends to be 30 percent cheaper than foreclosure.
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Process
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The first step in conducting a short sale is to ask if your lender if it will even consider a short sale, the Nolo legal website states; some may not, so it's important to ask before you start. If you get the go-ahead, you follow the same steps as in a regular sale: advertising your home and negotiating with buyers or hiring a real-estate agent to help you. When an offer comes in, you have to present it for approval not only to your lender but second-mortgage lenders and anyone else with a claim on the house.
Time Frame
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Illinois mortgage broker Peter Thompson states online that he's seen short sales close in one month and some take as long as six months. "USA Today" reporter Stephanie Armour writes that part of the problem is that the early-21st century foreclosure boom is flooding banks with short-sale offers and many of them have had no experience processing them. If the bank is too busy to assign your foreclosure a case officer, there may be nobody on staff to make the decision.
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Bottlenecks
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Sometimes banks set conditions that can block a good officer, "Realtor" editor Robert Freedman writes; refusing to say yes unless the buyer uses an in-house lender is an example. Junior lienholders such as second-mortgage lenders may hold up the process because they don't think they'll receive enough money. Inexperienced real estate agents who don't present the offer properly or forget to check with junior lienholders can also slow the process down. Even experts in short sales may have so many irons in the fire that they can't handle yours efficiently.
Considerations
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The more money a buyer offers, the more likely the bank will be to move quickly. However, Nolo states, you can't know what your bank will consider acceptable until you submit the offer. Freedman recommends that you talk to buyers before you submit the offer and make sure they understand that short sales take time and they may have to wait to get the deal they want.
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References
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