Question: How long does it take to short sale a home?
Answer: It is often difficult to determine exactly how long it takes in days, weeks, or months to short sale a home because there are many factors involved in determining how long it will take to short sale a home. Although it is difficult to set a date on a calendar when you can expect a short sale approval there are three very real phases every short sale goes through. Knowing these phases will help you to know where you are in the process and can give you a better idea of how long it take to short sale a home. The three phases a short sale goes through are Submission, Valuation, and Approval.
Phase 1 of 3: Submission
The Submission phase is when all documents are submitted to the lender for review and a Negotiator (this will be your main contact) is assigned. In order to process the short sale and validate the Sellers Hardship the Seller will need to provide the following documents. Before preparing these documents you may want to check if you are eligible for a HAFA short sale.
List of documents that may be needed
- Hardship Letter
- Financial Statements
- HAFA Forms
- Lender Specific Forms
- Bank Statements
- Tax returns
- Pay Stubs
- Pnl (if self employed)
- Sales Contract
- Listing Agreement
- HUD1 (itemized list from a Title Company detailing cost associated with the sale and the Lien Holders net proceeds)
Phase 2 of 3: Value
Lien Holders (especially the first Lien Holder involved in the short sale) will want to know the value of the property prior to approving the short sale. Lien Holders do not want to sell the property below market value. They will more likely approve a sale if the offer amount on the sales contract and the Lien Holders opinion of value are similar. In my experience, banks will generally approve an offer if it is within 93%-100% of their opinion of the value. Check the value of your home.
The Lien Holders will likely complete any or perhaps all of the below to obtain their opinion of value:
- Appraisal (Completed by a Licensed Appraiser however not the same appraisal you would use for financing the property)
- B.P.O. (Broker Price Opinion often completed by a local Real Estate Agent)
- A.V.M. (Automated Valuation Model an online opinion of value)
The real name for a short sale is short pay as one or maybe all of the lenders involved end up short of the amount owed upon the sale of the home. It is rarely a quick sale as it can often take months to short sale a home however follow the three phases outlined above and you will have a better understanding of how long it takes to short sale a home. More information about what is a short sale.
For more information about the $3,000 Relocation Assistance (if you qualify for HAFA). Contact us for a free HAFA brochure or visit our office at 5079 Lone Tree Way Antioch, Ca 94531
Disclaimer: Readers with credit, legal and tax questions are advised to see the advice of an attorney or tax professional. The information above is not to be considered legal and or tax advice. Credit is hereby given for many of the links, information and resources to Making Homes Affordable.gov, California Department of Real Estate, Fannie Mae, Freddie Mac, HUD, CAR.