When buying a short sale property or selling a home in a short sale, it’s important to remember that this process is slightly different from a traditional real estate transaction and as a result, short sales may be subjected to a very unique set of potential delays.
In fact, short sales used to be known as a very lengthy, time-consuming process but new legislation and regulations have served to speed the process significantly.
Bureaucracy and Bank Processes
A short sale requires special review and approval from the bank in order to move forward. A short sale involves the lender accepting an amount that’s less than the balance owed on the mortgage loan, so the bank must review the numbers and its options to ensure that approving the short sale is their best option.
The length of time it takes a bank to review an offer on a short sale will vary according to the precise lender and the number of short sales that the lender is handling at that given point in time. Some lenders are more efficient than others and some lenders handle a much higher volume of short sales than others, which means there’s significant variation in terms of how long it takes to approve a short sale.
Unfortunately, there’s not much you can do as a buyer or as a seller to speed this process.
The Short Sale Paperwork
Short sales are even more paperwork intensive than a traditional real estate sale transaction. As a result, there’s a much higher chance that you may experience a delay as a result of an issue involving the paperwork. A missing document, a missing signature or an improperly-completed form can result in delays.
For this reason, it’s important to double check to ensure that you’ve completed each form properly and always follow up to confirm that the recipient has actually received the document that was sent.
In some cases, there may be more than one loan on a property, such as a primary mortgage and a second mortgage or home equity line of credit. In these cases, the process is complicated because you have multiple loans, often with different banks.
Matters can be complicated by the timeframe that’s associated with short sale approvals. For instance, Lender A may approve a short sale which the condition that it must be completed within 30 days. If it takes Lender B longer than 30 days to approve its portion of the transaction, then the first lender’s approval will expire and the process must start over again.
There are a number of unique steps and processes involved when going through a short sale instead of a traditional real estate transaction. You’ll have lots of advantages in this regard when you work with a short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
If you’re seeking to sell your home as-is to an investor or in a short sale transaction, turn to Kristine Zelazo, the Short Sale Gal! Complete the home pre-sale form to provide Kristine with additional information on the property in question. Questions? Call 800.664.0616, x802.