A short sale can take anywhere from 45 days to longer than year.
More Info: The question of how long it takes a short sale to be completed is a common one, especially in today’s market. The answer to this question is one of the main reasons why fewer people are taking advantage of short sales on homes than they otherwise would. In order for a short sale to take place, the seller, the sellers lenders, the listing agent, the selling agent, and the buyer all have to come to an agreement. It should come as no surprise that it is difficult to get this many people to cooperate with one another.
Gathering the Paperwork
The process begins when the seller of the home has to locate all of the financial information necessary in order to submit it to their lender. There is a great deal of information that they need to accumulate, and it includes bank statements, W2s, tax returns, a worksheet that summarizes their current economic situation, and a letter that explains why they have fallen into this particular situation. In addition to this, they must sign a document that grants the lender permission to talk with the listing agent, or anybody that the listing agent has chosen to be their representative in the process. In addition to this, the seller has to sign an agreement to list the property for sale. All of this can take quite a bit of time, and it is only the first step.
There are some lenders that will take all of this information into consideration and pre-approve a short sale, but most of them do not. Instead, most lenders will treat the home as being in a pre-foreclosure status until an offer comes along to buy. Instead, they will simply set aside the information until later. If some of the information needed for a short sale to take place is needed, the lender will typically ignore this until an offer for the home is made.
The Offer Is Made
Once an offer has been made on the home, in most cases all of the financial information will need to be submitted yet again. It will again go into a large pile where it will wait until a negotiator is available. This wait is the longest part of the entire short sale process. There are only a certain number of negotiators available, and most of them are extremely busy in this financial climate. The banks are in no hurry to hire more negotiators either, as they don’t want to spend more money to hire people that will speed up a process that loses them money. It is not uncommon for a negotiator to have over 250 short sale files that they are busy working with at a time. Each of these files has about a hundred pages in them. Obviously, this means that it takes a very long time to complete the process. It depends on the lender, but this part of the process can take as little as two weeks (rarely) or as long as 180 or more days.
The Negotiator Intervenes
The negotiator then orders a broker price opinion and decides if the new price listing is acceptable. The process of reaching an agreed upon price can last between a few days and a few weeks. After this point, it usually takes one or two months for the sale to take place.
In brief, a short sale takes between 45 days and half a year or more from start to finish. Nevertheless, the pricing on a short sale can be excellent in comparison to other options.