How long does a short sale take?
The time length of a short can differ greatly from case to case. The average time it takes to close a short sale is six months. However, we have seen some transactions close in as little as two months while other drag on for over a year. Many different factors contribute to this vast difference in duration.
Listing agent:
One of the main contributing factors is your Realtor. It is very important to hire a Baltimore short sale Realtor who has a lot of experience in the field. Since short sales are not part of the “Realtor basic training,” they require a unique training of their own. Hiring a Realtor that has little or no short sale experience to entrust with the task of stopping foreclosure on your home is, in most cases, a death sentence. Not only are short sales different from traditional sales, but each bank has their own guidelines and short sale practices. It is important to have a Realtor by your side that has worked with nearly every major bank and is very familiar with their practices. Inexperienced Realtors are unaware of certain benefits and incentives entitled to borrowers who short sale, but experienced short sale agents work hard with banks to ensure their clients receive every benefit possible.
Buyer:
Impatient buyers are not cut out for short sales, in fact, they shouldn’t even look at them. Yes, when all factors play in your favor, the transaction can close in a short amount of time. However, in most cases the short sale will take longer than expected. Buyers who are eager to move into the home and think harassing the bank to hurry up will help the transaction, are not ideal in a short sale situation. Short sales are perfect for buyers who are in no hurry and wish to receive a great deal on a home.
Offer amount:
Once an offer is received on a home, the bank will perform their own assessment of the property. If the offer received matches up or exceeds the bank’s appraisal, the short sale will likely be approved. If the offer received on the property is high, your chances of being approved in a shorter amount of time increase.
Lender:
Each lender has their own practices when it comes to short sales. Though many have worked to improve their short sale departments over the past couple of years, some are still lagging behind. For example, Bank of America used to be one of the worst banks to work a short sale with, however now they are just the opposite after improving their short sale practices. Some lenders will respond to an offer right away, while others can take months. This is why it is important to hire a short sale specialist Realtor who is experienced in working with all major banks.
Bank disapproval:
If your lender denies the offer on your home, they will counter the offer. The buyer then has the opportunity to accept, deny, or counter. If your buyer walks, you will then have to start over in your attempt to attract a buyer to your property. However, the bank’s counteroffer now becomes your pre-approved short sale price. This means, when a new buyer comes along, they and you will already know exactly what the bank is expecting to receive. It will also cut the bank’s approval time greatly since the amount was already once approved.
Other factors:
- Having multiple loans on your property can increase the short sale’s duration. Now you need approval from not only one bank, but two or three.
- Mortgage insurance company approval
If all of these factors work together in your favor, the transaction can close in no time! Unfortunately, this is not typically the case. Speak with a short sale specialist about your unique situation to find out more information on how long it may take you to short sale your home.
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