Is 6 Months Too Long For Short Sale Approval?
I think 6 months is way too long for short sale approval. Short sale approval doesn’t happen in one day and buyers need to understand that — I get it. Lately, I’ve come across several short sale listings where the listing agent asks the buyer to wait tremendous amounts of time for short sale approval, between 4 – 6 months. If you’ve done enough short sales, you’ve experienced a 6 month short sale, they do happen here and there. For sure at the beginning of this crisis I would say a 5 – 6 month short sale was pretty typical for some lenders who shall remain nameless (or should I say shameless!). However, I would have to say that 6 months for short sale approval is now very far from the norm.
As a short sale agent myself, when I’m told that my buyer needs to expect to wait an entire half of a year for short sale approval, I give pause. I want to know why the agent thinks this file will take so long. Are there two loans to negotiate and the second won’t process until the first gives approval? Is there mortgage insurance on the note? Did the Republic of Iceland file a lien on the property? Does all information need to be coded and sent over to the lender in morse code? Please explain… and make it good. Often I find out that these agents are handing off their files to third party negotiators who are handling hundreds of short sale files. I personally don’t think it makes much sense to hire a bureaucracy to deal with a bureaucracy and that may be the reason why their approvals are expected to take so long.
Even with low inventory, the prospect of sidelining my buyer for 6 solid months is not appealing in the least. Something else WILL
come along. Before signing a listing contract, potential short sale sellers should be aware, how their file will be handled, and the agent’s track record on approval. I handle all of my short sale within my own brokerage and manage the communication on them personally to ensure a reasonable response time from the short sale lender.
Before deciding whether to short sell your home, it is essential that you obtain legal and tax advice, and consult with an experienced local short sale agent. If you are considering a short sale of your Santa Maria, Orcutt, or Lompoc home and would like a complimentary short sale consultation, please call my office to schedule an in person meeting or a telephone consultation at (805) 938-9950.
Tni LeBlanc is an independent Real Estate Broker, Attorney, and Short Sale Agent. She is a Certified Distressed Property Expert (CDPE), Short Sale and Foreclosure Resource (SFR) and Certified HAFA Specialist (CHS) serving California’s Santa Barbara and San Luis Obispo Counties.
* Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.
Copyright© 2012 Tni LeBlanc *Is 6 Months Too Long for Short Sale Approval?*
