There isn’t really any set amount of time that it takes to complete a short sale. The short sale may get approval in as little as 6 to 8 weeks but it usually takes 90 to 120 days to get the approval for a short sale. Frequently, it is a very long time before you will hear back from your lender if you prepared the package for the short sale properly for the lender. You should work with an experienced agent who will be in constant conversation with the lender and keep detailed notes. An incomplete package for the short sale will delay the short sale and because lenders receive so many short sale requests each day, the chances are that your entire package could be thrown away.
Although each bank has their own guidelines, the basic procedure is the same. Here are some of the steps that occur during the process of a short sale:
The seller will submit a complete package for the short sale that will include:
- A letter of authorization permitting your agent to discuss sale with the lender.
- An HUD 1 document.
- A financial statement that has been completed.
- A letter of hardship.
- 2 years of W 2 forms and 2 years of tax return forms.
- Recent payroll stubs
- 2 months recent bank statements
- A list of recent comparable sales or a comparative market analysis.
The bank will acknowledge that they received your file within 10 to 30 days.
A loss negotiator or mitigator will be assigned to you within 30 to 60 days.
A Brokers Price Opinion (BPO) will be ordered. A BPO is when a bank hires a real estate agent to do their own estimate of your property. The bank won’t tell you what this estimated value is.
A second negotiator is normally assigned within 30 days.
The entire file is then reviewed/sent to the investor within 14 to 30 days.
The bank then usually requests that all parties sign an Arms Length Affidavit.
A short sale approval letter is issued by the bank and assuming that the seller still has a buyer the sale can close.
In addition, your real estate agent will have sent the sellers short sale package, the earnest money check, the buyer’s pre approval letter, the purchase offer, and the listing agreement to the bank.
A short sale process is complicated and long that your short sale specialist plays a vital part in to ensure that the sale of the property is done as quickly as is possible.
