Short sales are notorious for their duration to close. It was only years ago when we saw short sales take sometimes up to 2 years to close, causing insurmountable stress to all parties, especially to the seller. So why do short sales take so long? One could easily blame the banks for the delay. However, that accusation does not apply to most banks in 2013. Systems have been upgraded, buyers are buying, and incentives to short sell for both banks and sellers have boosted. So why would a short sale take so long?
We set expectations from the beginning with all of our clients. A short sale is great deal for the homeowners but it will require about 90-120 days of effort to get the job done. Agent’s who have done short sales will know this. Homeowners who delay in submitting requested documents are the ones who end up prolonging the deal longer than it should and/or losing their home to foreclosure. The lack of motivation on the homeowner’s part will diminish the motivation of the other players.
Who are these other players? The banks/lenders and the buyers.
Bank/Lender: If you’ve ever dealt with them via a loan modification process, you will know they need accurate documents in a timely fashion. Documents have an age. They will ask you to resubmit your paystubs or bank statements if they are outdated. I’ve heard many files closing because of the lack of recent seller documentation.
There could also be two liens meaning you will have to submit the package to two banks and deal with another party. Often times, the second lien is not easy to deal with because they typically receive a much smaller payoff.
Buyers: A couple of years ago, the buyers were one of the most difficult parties to retain in a deal. Buyers are much more motivated now because of the low inventory but put yourselves in their shoes. You have money (cash or preapproved) and you have opportunities around you. There is usually an emotional tie into buying a home. If you have to wait more than 3-4 months on a home, how likely are you to lose that emotion and run off to another opportunity during those 4+ months?
Short sales are like a 3-4 month boot camp. We have been fortunate with our clients thus far but we’ve also set expectations from the beginning. Agents, please show your clients this article before starting them off on a short sale or you could easily waste 4+ months of time, energy, and money. Article here:
The listing agent is another player and is the most important one and as you can read in my many articles, I have high expectations for them.
Hope this helps
Peter from www.seattleshortsaleblog.com