You probably have heard that a short sale can take a long time to get approved and close. Try 353 days from the date on the contract to the closing date. Let’s call it one year. Since I represented the buyers on this short sale, I know the history of this transaction.
Short Sale Takes a Year
A short sale is the sale of a home that is upside down. In other words, the home sells for less than the balance of the mortgage, and that requires the bank to agree to take a loss by getting paid less than what they are owed. As a buyer, you might ask why a short sale would take any longer than a regular sale?
Short Sale Bureaucracy
The short sale process is tedious. Once the buyer and seller agree on a price, which is a fair market value price, the offer is submitted to the seller’s bank or mortgage company for approval. That process is the most bureaucratic process I have seen in 37 years in real estate. There isn’t room or time to list all that does and does not happen, but here’s a glimpse of the process.
Short Sale Process
The listing agent is the only one allowed to communicate with the third party entity handling the short sale for the bank, but that point of contact is not the same person throughout the process. But get this, that point of contact rarely gives the listing agent her phone number or direct email. Instead the listing agent is forced to communicate with this mystery person by logging into some antiquated software. Getting responses from the bank can take weeks for every communication. This goes on and on and on for every little communication, every detail, and as if this wasn’t hard enough, the people handling the short sales for the banks rarely have any real estate experience. I’m not kidding! The short sale process should not take so long, but can you imagine being a buyer waiting 353 days for your short sale to get approved and close!
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