(Updated 7/4/12)--One of the most common questions I get is "How long will it take to do a short sale?"  Answer is...it depends on the complexity of the case meaning how many lenders or lienholders are involved, the lenders speed in processing the request, how quickly the homeowner can get you the documents you need.  The truth is that there is no simple answer because a short sale has many variables that can impact the processing time.  The more loans on the property, the longer short sales typically take but what I do to save time is submit the short sale package to all the lenders from the start so that the approvals hopefully come around the same time.  Processing time depends on the lender but in my experience, the smaller lenders like Quicken Loans, Credit Unions, etc. are faster and more efficient than the larger commercial banks like Bank of America, Citibank and JP Morgan Chase.  Another factor is how close the offer is to fair market value and how close the appraisal is to fair market value done by the short sale lender.  An unrealistic appraisal done by the short sale lender will result in a high counter offer and the buyer will walk causing further delays in finding another buyer.  This is why it's important to have a back-up buyer if possible.  So if you are going on your third or fourth buyer, chances are that the short sale is taking a long time.  A common problem seen with short sales is with Bank of America using their own appraisal company to value their short sale listings and their values always coming in much higher by not factoring in the damages/condition of the property.  My experience has taught me to dispute unrealistic bank appraisals with another full appraisal by an independent appriaser to avoid loosing good buyers.  Also, I will advise the short sale client to only accept offers which are close to fair market value so there are recent sold properties to support the buyer's offer.

 

Good news!!!  Loans owned by Fannie Mae and Freddie Mac will now be required to give short sale buyers a decision within 60 days.  To see if your loan is owned by Fannie Mae or Freddie Mac, use the loan look up tool on the left side of my website or google "Fannie Mae Loan Lookup" to get to the site.  Fannie Mae and Freddie Mac will also will be required to respond to a submission to do a short sale with a buyers initial offer within 30 days.  This is a positive step that will help homeownes get through the short sale process more efficiently. Also, programs like the HAFA program have specific timelines (see below) that should be followed by servicers so if they take too long to review an offer or something else, I will open an escalation with the HAMP Solution Center which is very effective in getting a response.  This is just one of the advantages of doing a HAFA Short Sale.