I know this topic has been addressed, and I know that HAFA will change some of these timelines for qualified sellers. However, in light of many changes in how the banks are handling short sales, I feel it is worth revisiting. I am always upfront with the timeline so buyers/buyers agents know exactly what they are getting into. I answer at least 5 calls a day from agents asking me... "Do you think we can get approval before the tax credit expires???" My answer is always that "I can't promise that", and here is why.
Every bank and every file is different. There is conflicting information all over the internet about how long it takes. It used to be that the larger banks took longer, but in the last 3 months I have gotten:
- An approval from Bank Of America in 43 days (as well as one that took 4 months)
- An approval from Wells Fargo in less than 3 weeks (as well as one that was denied based on seller getting more hours at work in the last two weeks of the process)
- An approval from HSBC in 12 days (and a counter offer once the file was transferred to another department unexpectedly.... we did eventually close but for twice the amount of money and 30 days later because we had to start over)
Bottom line is that it is completely unpredictable! For those "textbook" conventional scenario's... minus HAFA, Fannie Mae, VA, subordinate lien holders, etc.... Here is a timeline of the short sale process:
- Offer and all supporting documentation is submitted via FAX to loss mitigation: 2-5 days
- Documents are received by the bank and scanned into the system: 7-10 days
- File is assigned to a negotiator: 15-20 days
- Appraisal or BPO is ordered: 15-20 days
- Appraisal or BPO is assigned/completed by agent: 15-20 days
- BPO and all documents reviewed by negotiator and a determination is made on banks bottom line payoff: 20-30 days
Total: 74-105 days
- If buyer counters the banks final determination, please add an additional 5-10 days
- Once buyer and bank agree on a price, the file is sent to the investors for approval, which can take another 5-10 days
It is important to note that the negotiators sometimes have in upward of 500 files on their desk to attend to. They are processed in rotation, therefore you have to patiently wait your turn..... no amount of calling, emailing, faxing, etc. will expedite the process... in fact sometimes it will slow it up. Often weeks go by with no news at all, but it doesn't mean there isn't anything happening.
Other things that can slow the process:
- Missing and/or incomplete information. Every time the bank has to ask for something new or updated, it can eat up 3-5 days!
- Not maintaining or vacating your property - Vacant homes dont sell as quickly
- Moving out too quickly - that may disqualify you for HAFA - and up to $3000 in moving expenses
- Not choosing a Certified Distressed Property Expert to handle your short sale. Statistics show that a CPDE can close a short sale in 50% less time than other agents!
*Photo courtesy of the Certified Distressed Property Institute, LLC