When financial times are tough, it's common for homeowners to find they need to sell their homes
when they are "Under water" (sell for less than they owe on their mortgages.) This is known as a "short sale."
Lenders agree to it because their return is often better on a short sale than in a foreclosure. If you're a buyer,
a short sale can mean a good deal, as long as you're aware of the extra time and work required to make
Selling a home short is a difficult process. As the founder of www.TEAMUNDERWATER.com I focus my efforts on listing
and selling homes that are Under Water. I negotiate with the bank to release the lien, and give a full waiver of
deficiency to the seller. That means that the seller is not on the hook for any unpaid balances. I do not stop negotitations
until I have this deficiency waived.
Until the offer is recieved, selling short is exactly the same as a regular sale.
I will advertise the home in many different ways, and myself and other agents will show the home to
During this time it is a good idea to start gathering the proper documentation. Each bank will vary slightly,
but standard list can be found on the DOCUMENTATION page.
Once we get the offer in hand, that is when the short sale begins to vary from a standard sale. We most likely
will not counter offer back on the price that is offered (as long as it is within the realm of reasonable, it does
not matter to the seller what the home sells at). We may decide to change closing dates, extend timeframes,
or counter offer for personal property (appliances).
We then need to submit all the appropriate documentation that we have already gathered. We handel all document
submission, and negotiations for you, so that we can successfully close the short sale. It is important that if the
Bank asks for specific documents, that we supply it to them as soon as we can.
One of the reason it takes so long is the bank requires copies of the supporting documents to verify that the
homeowners cannot afford to keep making their payment and have a financial hardship. Once this paperwork
is received, it is reviewed many different departments throughout the bank.
*Click here for detailed process*
After we have come to terms on all of the aspects of the offer, we have "short sale approval." We then proceed
through the home inspection, appraisal, and finally to closing.
Click here for an interesting article that may change your perspective on short sales.
The general process is:
- Submit offer
- Seller signs offer
- wait ...
- Seller comes back with approval, denial or counter offer from bank.
- If approved, schedule your inspection and start securing your mortgage.
The first thing is to make sure that you have the time and patience to work on a short sale. They
are not for everyone. They can take 60 days to 180 days or longer to complete, depending upon
the bank that has the mortgage.
To directly answer the question "Exactly how long does the process take?"
All I can say is; how ever long that it took, that’s how long it takes. There really is no set time
One of the reason it takes so long is the bank requires copies of all bank statements, tax returns,
w-2s, and other supporting documents to verify that the homeowners cannot afford to keep
making their payment and have a financial hardship. Once this paperwork is received, it is
reviewed by a loss mitigation specialist. After they review the paperwork from the sellers, and
the offer, the bank will make a decision to approve it, reject it, or counter it.
Buying short sale properties can be very good investments. The #1 thing you must be is patient!!