How long do banks take on short sales?

Question

Hey all. I have made an offer on my first short sale and was curious as to how long does it take to receive a decision from the bank. If any of my fellow BP peeps have bought a short sale I would love to know your timeline.

Ron S. · Answer

There is what's on paper and there is reality. What's on paper is that by Federal Rule, a decision must be made within 30 days from the date of receipt of a complete (or substantially complete) short sale package.

Where what's on paper and reality start to differ is interpreting what a full and complete short sale package is and, the actions that occur after its submitted. If you have a submission, and its complete, and you have a competent agent, and are realistic about what's going on, there is no reason not to decision the offer in 30 days and again, the Feds say we have to.

When the appraised value is $400,000 and you offer $200,000 because that's what makes sense to you for your cash flow objectives, and/or when you are asking for 6% in closing costs and another 6% in seller concessions, and a 90 day close contingent on you selling your existing home, and the property is currently in foreclosure and scheduled for sale, and/or the agent forgot or didn't ask if there was any other liens that also need a full and complete package submitted, and/or the agent is the buyer and wants a commission on top of the haircut on the payoff, etc.. That's where you are going to run into delays.

Minna Reid · Answer

It could be a couple days...to a couple years lol. I wish I was joking. On average though a properly worked short sale should take about 2-4 months from contract to close.

Doug Smith · Answer

That really depends on not only the institution, but the REO real estate agent and the special assets officer at the bank. Special Assets Departments in Banks are usually manned by people that have been around the block. They've also been through merger after merger and they know that as soon as a bank doesn't need them any more, they tend to be laid off. That being said, it might be in the bank's best interest to move quickly, but banks don't make decisions...the people that work for the banks do. The special assets officers tend to know that they can work themselves out of a job by quickly solving all of their problems. I know this because I was a banker for 25 years prior to taking over at Castle Rock. They are going to move in their own time. Also, many REO realtors get paid very little and they sometimes aren't in a huge hurry to get things done. Be patient. It's unfortunately something that is difficult to rush.

Brett Goldsmith · Answer

Most servicers quote 45-90 days for a decision once they have a complete package. Then you have the closing period. If delays and or large  hurdles appear than it likely could be considerably longer.

Account Closed · Answer

Short sales can get you a home at a surprisingly low price. In fact, the low cost of short sale houses is often one of the biggest and only draws. Otherwise, short sales are notoriously complicated and frustrating to deal with and can take a great deal of time. The process of working towards a mutually acceptable purchase price for short sale property may take months and months. This is especially true when there are a number of players involved.

All that said, short sales can be very worth it, financially speaking. A bargain on a home purchase can be a rare event and one worthy of jumping through some hoops.

Phil Z. · Answer

3-6+ months if everything goes right.  Didn't anyone tell you this before you made the offer?  I always have the buyers sign off on a 90 day minimum.

Terrell Garren · Answer

Generally, as long as a peace treaty in the Middle East. Additionally, you will find easier to have a phone conversation with the president of North Korea than the decision maker at the bank.  Best.

Nick Scapellati · Answer

@Brett Goldsmith thanks for the input.

Nick Scapellati · Answer

@Doug Smith I appreciate the knowledge.

Nick Scapellati · Answer

@Minna Reid thank you.

How long do banks take on short sales?

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