Most real estate agents are "people persons," so it's to be expected (and commended) that we often approach situations with an "eager to please" attitude. However, it seems to me that many agents are often overly optimistic in their portrayal of the short sale time-line, which to my way of thinking can lead to disappointments and failed transactions. Better to err on the "long side" when explaining the short sale time-line, than to risk disillusioned clients/customers down the road.
As a "well seasoned" practitioner myself, I can admit that I've received short sale approvals in as little as 8 weeks, and from the dreaded "Bank of America," in as long as 16 months. This fact begs the question, "Should I stress the long, or the short approval periods when courting prospective short sale listing clients and prospective buyers of those listings?"
Negotiation
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Preferring to err on the side of longer rather than shorter, and after explaining that we could conceivably get a quick short sale approval, this is my standard explanation to prospective clients/customers of what to expect throughout the process:
As soon as ALL of the paperwork is gathered we will submit to lender immediately - they will typically acknowledge receipt in 4-6 weeks. In another 4-6 weeks after that they'll order an appraisal - they will typically acknowledge receipt of the appraisal in another 4-6 weeks after that. Within 4-6 weeks of acknowledging the appraisal they will begin negotiating - they will typically come to the table with their final offer in 4-6 weeks after that. Once we have the final offer, my closing with them will take place in 4-6 weeks:
4-6wks + 4-6wks + 4-6wks + 4-6wks + 4-6wks + 4-6wks = 24-36wks (6-9 months)
My team will handle everything and there will be nothing for you to do. If the bank asks for additional documentation, we will contact you - the quicker you can get it to us the better.
Typically the collections department has no clue that the negotiations are in process with the short sale department and they may continue to call you weekly. When you tell them that a short sale is being negotiated they will tell you that they have no record of a short sale negotiation and you should send them the paperwork. They will be telling you the truth - the collections department really won't have a clue that a short sale negotiation is in process, and no matter how many times you tell them they will not put it into their system and they will continue to act as if nothing is in process - the bank departments rarely talk to each other. Don't be worried. This is typical. Rest assured that my team is doing its job. If you get any correspondence from the lender, or the court, get it to me immediately, so we have a copy for our file.
While we will update you regularly, do not expect to hear anything of significance for 2-3 months at a time b/c there will likely be absolutely nothing of significance to report for 2-3 months at a time - the banks can be that slow. Basically, sit back, and in 6-9 months from now (hopefully less) we'll know if the bank is willing to do the short sale. Sickening, maddening, and crazy I know, but that's the way these banks operate. We're prepared to close on these transactions in 4-weeks from the time you accept a buyer's offer, but the banks often slow the process to a crawl. For your own sanity, just put it out of your mind and rest assured we're working on it. If anything important happens we'll let you know. Count on nothing important happening for months.
Yes, I'm brutally honest, and you might even say that when it comes to explaining the short sale time-line I take a negative approach, but I feel I'm better serving the client/customer by preparing them for how maddeningly frustrating the transaction could be, than if I were to paint an overly optimistic outlook for what can be a very complicated and prolonged transaction.
The Shocking Truth of the Short Sale Timeline!
The SaraMana pre-Foreclosure Assistance Team specializes in helping Sarasota and Manatee County, FL families and individuals facing foreclosure to avoid foreclosure, and throughout the preforeclosure process. Sarasota, Bradenton, and Venice Florida area homeowners wanting to learn more about their foreclosure avoidance options can download the Free eBook "Should I Short Sale My Home? - A Homeowners Guide to Surviving the Worst Real Estate Market in History."
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