Sunday, January 13, 2008

Short Sale Time Frame

Our market will see more and more short sales in the coming months. Again, a short sale is when the owner of a property has a higher mortgage balance than the mortgage payoff, and sells for market value. Banks will sometimes forgive the rest of the debt in order to facilitate the sale if the seller has a hardship and cannot meet his obligation. This is a better option than foreclosure. As more of these properties flood our market, the backlog for lenders processing approvals has grown. Banks I have spoken with may have up to 400 files in process per "negotiator". So, if you make an offer on a short sale property, be prepared to wait for a response. Countrywide's average response time is now 43 days. They are hiring more people, but not fast enough to keep up with demand. Time your offer for a 60-day closing, but it is not unrealistic to assume it could be 90 days, or more.

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30 Comments:

Blogger Mateen said...

Hi Wendy.
I am in a process of buying a Short Sale property and the primary lender is Countrywide and I have put in the offer (my offer is the only when that went in). How long should I expect to wait for the contract ratification? Any ideas? The whole Short Sale process for this property started around Jan 1, 2008. Thanks for your insight on this.

March 4, 2008 at 9:14:00 AM CST  
Blogger Wendy Rulnick said...

Maureen, I am finding the current response time for a counteroffer about 75 days... The contract should have already been signed by the seller- just contingent on Countrywide's approval.

March 4, 2008 at 9:52:00 AM CST  
Blogger Wendy Rulnick said...

Mateen, Sorry for the misspelling! Wendy

March 4, 2008 at 10:02:00 AM CST  
Blogger Mateen said...

Thank you Wendy. That is exactly the case, the contract is only pending CW approval. Are you saying that it will take another 75days or did you mean the total time for the whole process to be 75 days. The Short Sale negotiator who is working with the Countrywide on this says that it may take another 2 weeks. That makes it 3 weeks from the time when we sent in the counter offer {which was based on feedback from the bank}.

March 4, 2008 at 11:06:00 AM CST  
Blogger Wendy Rulnick said...

Mateen, You are ahead of the game if they got back to you already with a counteroffer! I am finding the current response time for initial counter offer to be around 60-75 days, so I recommend most buyers use a 90-day total time period, from offer to closing. I think two more weeks sounds reasonable. If I were the listing agent working on this, I would contact the negotiator by phone or email about every three days. They are overwhelmed and sometimes "forget" to call the agent with news. Best of luck!

March 4, 2008 at 11:17:00 AM CST  
Blogger Mateen said...

Thanks again Wendy,

Yeah I am quite ahead in the process and they actually wanted to close in March so I gave them a settlement date of the 25th. Hope to make.
Thanks again & have a great day.

March 4, 2008 at 11:20:00 AM CST  
Blogger spokangie said...

We are considering a Short Sale but the realtor told us that it will cost us 50 points on our Credit rating and for 8 months. We have some equity in our home but not enough to place it on the market with a realtor. WE are not in default and nowher near forclosure, our payments are high and the first mortgage is about to increase by 3%. We are working with our lender to keep it at the same rate untill we sell, still waiting to hear from them.
I dont' want my credit affected, should we go ahead or wait and try and sell on our own. We have a past bancruptcy already on file, medical reason.

March 11, 2008 at 1:32:00 PM CDT  
Blogger Wendy Rulnick said...

This comment has been removed by the author.

March 11, 2008 at 3:00:00 PM CDT  
Blogger Wendy Rulnick said...

There is no way to get around a Short Sale affecting your credit. It may be up to 100 points, but could be more depending on payments associated with the mortgage. Your best approach is a loan modification, or new loan with a different lender. Also, your chances of selling are greater listed with a Realtor, and for more money. Why? Increased market exposure.

March 11, 2008 at 3:13:00 PM CDT  
Blogger Gloria said...

Hi, I just saw your blog and I'm curious to know if anyone can inform me. I have put an offer in for a short sale back on march 12th. It is officially May 13th, thus making it day 57.

The seller I am buying the house from had two loans from countrywide. Both those loan departments have now approved our offer. We were told today that now our case got sent to a final guy in countrywide to do something...

This is where I am lost. I thought once the loan departments approve our offer, countrywide just has to send the paper work? Is this correct? Can anyone tell me what the process is at countrywide? Thanks.

May 13, 2008 at 7:28:00 PM CDT  
Blogger Wendy Rulnick said...

Hi Gloria,
I may have responded to you in another blog. Two months is not that long to wait for response from a bank for a short sale. Normally it takes 90 days, so you are way ahead of the game. Once your offer is approved it may take a week or so to get the paperwork. I don't think you have anything to worry about. Congratulations! Wendy

May 30, 2008 at 5:34:00 PM CDT  
Anonymous Short Sale Definition said...

I have had short sales take just a few weeks and as long as a year! On average I have noticed they take 2-3 months and lately a bit longer.

April 28, 2009 at 1:07:00 PM CDT  
Anonymous Anonymous said...

We submitted our offer 103 days ago and are starting to worry as we have not heard anything back at all. Should we be worried?

May 18, 2009 at 6:22:00 PM CDT  
Blogger Wendy Rulnick said...

Have your agent check with the listing agent. Find out if the appraisal has been complete, and where the file is. 103 may not be bad depending on the lender.

May 19, 2009 at 7:13:00 AM CDT  
Blogger H said...

Hello Wendy,
My husband and I placed an offer on a short sale on the 15th of July. SELLER approved on the 25th and then on the 1st of Aug we got a counter offer asking us to remove contingency in reguards to inspection and title cost. We accepted the counter and last week I got an update stating that the APPRAISAL was conducted on the 2nd of September and once the appraiser finishes his report he will submit to the bank. We are pretty sure that we our offer is for fair market value for the area and we did offer 20000 over the asking price. Do you know how much longer this all should take if the appraisal meets the value of our offer? We are just really looking forward to the 8,000 dollar tax credit; however, we need be walking through the front door by the 30th of November in order to obtain the benifit. Thank you for your feedback.
Take care,
Marie

September 13, 2009 at 3:10:00 PM CDT  
Blogger Wendy Rulnick said...

Hi Marie, It looks like everything is well underway with your short sale. The time frame left, however, depends on the bank and their backlog. Even after appraisal, some banks take two more months. I would guess 50-50chance you'll make the deadline.

September 14, 2009 at 11:25:00 AM CDT  
Blogger diedranapier said...

We put in an offer on a shortsal on 5/8/09. It is now 10/23 and we have no response from Countrywide/Bank of America. I was told it was finally assigned to a negotiator on 9/22. Since then we still have not been given any timeline as to how much longer this can possibly go. Our closing date in our contracts was 8/6/09, so we are well past that. What recourse, if any, do I any should the bank decide they do not like the deal?

October 23, 2009 at 3:31:00 PM CDT  
Blogger Wendy Rulnick said...

Hello, Find out what "Phase" the file is in. It should be in Phase II, the decision phase by now. If not,then someone dropped the ball. Bank of America is taking longer and longer, unfortunately. You do not really have any recourse! Just make sure the rep on the short sale follows up regularly.

October 23, 2009 at 4:07:00 PM CDT  
Blogger diedranapier said...

I spoke with the seller's mortgage broker, who says they have been in contact with Bank of America as much as possible. She has escalated the problem up to supervisors and managers. It has now been assigned to yet another negotiator because the first 2 did not close the file within 30 days. Supposedly it is in Phase II. Hopefully it won't just get pushed to the bottom of the next negotiators files. My problem is this, they keep "losing" the appraisal. From the information provided to us, they have "lost" the first 2 appraisals they completed, they have now requested another one be done. Are they waiting for the market to go back up or what?

November 1, 2009 at 9:47:00 AM CST  
Blogger Wendy Rulnick said...

Bank of America short sale department is just inefficient.

November 2, 2009 at 10:04:00 AM CST  
Blogger top said...

hi Wendy
i am in the process of buying a short sale. the contract was signed on march 23rd and submitted to wells fargo. it is june 13th and still no news. is there anything i can do to make it move?

June 13, 2011 at 4:04:00 PM CDT  
Blogger Wendy Rulnick said...

Top - Please have your agent check in with the short sale listing agent or negotiator once a week. Find out if the short sale lender's valuation was done. Find out if there is MI (mortgage insurance) on the loan, or if the loan is in the HAFA program. Any of these could be causing a hold up.

June 13, 2011 at 4:17:00 PM CDT  
Anonymous Anonymous said...

hi wendy
i am trying to buy a short sale property
the contract was signed in 03/2011 bpo was done in 04/2011. another appraisel performed three weeks ago. neither my attorney nor seller's attorney possesses any kind on information stating waiting to hear from the bank. it has been 5 mo. what to do?
thank you

August 1, 2011 at 4:50:00 PM CDT  
Blogger Wendy Rulnick said...

Hi - 5 months of waiting should be close to the decision time. Someone should be calling the short sale lender once a week, minimum to find out what stage you are in. Since both valuations are in, your file should be well on its way to approval.

August 1, 2011 at 4:57:00 PM CDT  
Anonymous Anonymous said...

hi wendy. the seller's bank came back with a counter offer which i accepted without bargaining, my attorney said it would take 3-5 business days for the short sale approval, then she said it would take 2-3 weeks as the seller had a second mortgage with the same bank. it has been 3 weeks, and no answer. is it possible that my deal falls through?

August 29, 2011 at 9:23:00 AM CDT  
Blogger Wendy Rulnick said...

Anonymous - The junior lien holder probably just needs more time. Sometimes they will order a full appraisal, which slows down the process.

August 29, 2011 at 10:33:00 AM CDT  
Anonymous Anonymous said...

hi wendy
thanks for you reply
is there any time frame for the junior lien holder to agree. as it is i have been waiting for over 8 mo
thank you again

September 6, 2011 at 12:44:00 PM CDT  
Blogger Wendy Rulnick said...

Hi - 8 months is ridiculous!

September 6, 2011 at 12:50:00 PM CDT  
Anonymous Anonymous said...

hi wendy
i accepted the counter offer 4 weeks ago. the seller has the junior lien which is most likely causing the delay, any idea what is
usual time frame for short sale approvalgo through? by the way the seller's bank is well's fargo
thank you so much

September 8, 2011 at 11:53:00 AM CDT  
Blogger Wendy Rulnick said...

Short sale approval time frames can be 2-4 months...

September 8, 2011 at 2:30:00 PM CDT  

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