Buying A Home
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Why does it take so long for a short sale?
Why does it take the bank so long to accept a short sale offer? Are they holding out for better offers? Are they really that bogged down with short sales/foreclosures that they can't respond sooner?
We're thinking about putting an offer in on a house that we love but I've heard the timeframe could be as much as 4-6 months until close. We've not sold our house yet so that doesn't totally deter me since we'll need time to try and sell ours.
TIA
Re: Why does it take so long for a short sale?
I live in Canada so I am not sure if this is relevant but here is how it works here:
The bank looks at the offer, compares it to what is owed, and how long it has been on the market and such. The offer also needs to be already financed, no pre-approvals. There is quite a few houses that are up for short sale right now. So this process can be long.
After the bank excepts the offer, they set a court date. The house will continue showing and anyone who wants to go down to city hall can look at the offer in the house. If they are willing to pay more then the excepted offer they can go to court and show the judge their offer, at this time anyone new bringing a offer to the table has to have a certified cheque with a partial down payment amount of $10k, and willing to close in 10 days, if you want an inspection done it has to be done prior to court.
This can be a long process as trying to get a court date is hard, and people can outbid you.
I am not sure if it is the same in the USA. But this is way we walked away from every short sale we looked at.
I don't know about the big banks, but the smaller banks in my area admit that they're holding out for more offers.
http://pandce.proboards.com/index.cgi#general
You put an offer in on a short sale w/ 2 loans and your realtor didn't tell you it would be a lengthy process?
Oh, we knew. We were told it could take up to six months, so we were prepared for the wait. It doesn't make it any less ridiculous though. We have the luxury of moving out at the drop of a hat so we aren't in a rush, I'd like it to be tomorrow, but know full well it could be four more months or even never at all.
Our experience was somewhat different- our short sale went quickly. We put an initial offer in on a Sunday- after counters it was accepted on that Friday. We would have closed in 50 days- if our lender hadn't been idiots (many reasons here)- we had to switch lenders in the middle of the process. So it took 90 days.
But there was only one bank involved and it was a local bank that had a preapproved amount that they would accept- we happened to offer close to that and so it was accepted. They also had one person assigned to their foreclosures. We went to them for a mortgage when out initial lender turned out to be tools. We got a great rate and things went sooooo smoothly.
The really do take forever! We put in our offer in October, the seller gave us a counter offer a week later, which we accepted, and then it had to go to the bank. Our realtor told us he expected us to have an answer by christmas, but it turned out that the loan was held by 2 banks, the first one approved it at the end of January, and the second is yet to approve. I have been told that it is at the final step, but it has been there for about a month and a half at this point. The crazy thing is, that we know the people who own the house, and they were granted some type of assistance and moved out already, so the house is just sitting vacant right now.
You would think they would want to get a move on things, since they obviously aren't making anything on the house just letting it sit around. The house was on the market already for a year before we put the offer on it, and it never even had any other offers. It seems crazy. Anyway, our wedding is in a month and a half and we were really hoping to be able to get the house by then, but it looks like it won't be happening.
Good luck! The worst part, even if you don't need the house is just waiting and knowing that you could wait for 8 months and then not even get it.