Homebuyers who are interested in buying a short sale home should be prepared to wait. A conservative estimate should allow six months, from start to finish, in a short sale. The term of a short sale varies from that of a traditional real estate transaction. It can take weeks for the lender to decide on an offer.
The lender will then issue an approval letter detailing the terms of the agreement. Mortgage lenders prefer to close short selling within 30 days or less after approving buyers' offers. In fact, lenders typically push to close short selling two to three weeks after the sale is approved. If you've found a short buyer for your home, you and your buyer should be prepared to adapt to your lender's quick closing deadline.
You can also help close your short sale by staying in close contact with your lender throughout the closing process. What is a short sale? 10 key benefits of a short sale What does it take to complete a short sale? Understand a short sale (real estate), why would a lender accept a short sale? Why do homeowners choose to make a short sale? Is a short sale better than a foreclosure? How is a short sale different from a regular sale? What is the short selling process? Can I get relocation assistance for a short sale? How long do short sales take? What happens to taxes after a short sale? Buying a short sale: A short sale buyer's guide: Lenders can accept a short sale within a month or two. The typical time period for accepting short sales is 60 to 120 days. The term may be a little shorter or longer, depending on your specific situation, your property and your lender (s).
What is normal for the waiting period depends on the bank. Some banks get approvals in less than 30 days, while other banks' short sales can sometimes be terminated within 24 hours. On the opposite side of the spectrum are other lenders so inundated with short offers that their employees may not respond promptly. Ask a real estate agent with short selling experience in your area to give you a better idea of how to craft an offer with a high probability of being accepted.
A short sale home usually sells for less (or “less”) than the remaining mortgage loan amount. The amount of support you pay depends on several factors and the type of short sale you're approved for. That said, in some states, the law requires that if a short sale takes place, any difference must be forgiven. Completing a short sale has no cost, it usually has a lower impact on your credit (a foreclosure will stay on your credit report for seven years) and completing a short sale may have tax advantages compared to foreclosure.
If you see a house languishing in the market month after month like a short sale, it's not usually the lender who delays the sale. While a foreclosure basically allows you to leave your home, albeit with serious consequences for your financial future, such as having to file for bankruptcy and destroying your credit, completing a short sale is labor intensive. As a quick refresher, a short sale is when a homeowner has fallen behind on their mortgage payments and is approaching foreclosure. Usually, the lender will only accept a short sale if the owner has just been through difficult times.
If executed successfully, a short sale can mitigate the financial consequences of an unfortunate situation. In real estate, a short sale can take place when a homeowner sells a home at a price lower than the outstanding mortgage amount. Once you've obtained approval from your lender to make a short sale, it's time to create your short selling proposal and start looking for potential buyers. It is something that requires a professional or a team of real estate agents with extensive experience in short sales and connections within banks.
Short selling tends to be long transactions and requires a lot of paperwork, and can take up to a full year to process. .