Hi Phoggie,

I closed on a short-sale about 3 months ago. The process took almost exactly 2 years from initial contract.

Of course, I am buying as an investor, so I was "working the negotiation" sharply.

If you're buying retail (through an agent) then I'd budget 3-4 months, in general.

Luck!
Dave Donhoff
Leverage Planner

My friend just backed out of a short sale because after 5 months there was no appraisal yet. He is buying a condo instead where it is not a short sale and things are going much quicker. There are many horror stories out there about short sales. For some reason, banks take their sweet time on them. You can get a much better price but you'll be tortured in the process.

Be ready for delays.

No one likes to lose money, and the bank takes a loss on the short sale (hopefuly smaller than if they let the place go to foreclosure).

It is important who actually owns the note.
They have the final say on the short sale.

Exactly nine months today into a short sale. "Written approval any day" seems to be the mantra. Im sure my file has been seen by everyone who works at B of A, at least it seems that way. In this market short sales are not necessarily the bargain they once were. Most are priced at fair market value. You need nerves of steel and the patience of a saint to go through this process.

I have been involved in a number of short sales and one of the delays is usually caused by the sellers slowness to provide all documentation to the lender for the short sale to proceed. Once the "file" has been approved and assigned to an asset manager the transaction can move pretty smoothly....or not. Four to six months are about average for me.
Asset managers evidentially have never heard of email and have always asked for documents to be faxed to them....I usually fax the documents 5 days in a row and follow up each day.....documents mysteriously get lost all of the time.

I'm about 5 months in to a short sale purchase right now. We got our first counter offer from the bank last Friday, and countered back. Who knows what will happen.

This is a cash purchase of a vacation property, so we're not too stressed by the wait. I couldn't imagine dealing with this to purchase a primary residence with financing.

I keep hearing that there are so many short sale listing out there. They must really be skewing the market, I can't imagine the typical buyer wanting to deal with this.

Today marks 7 months since we put in our offer on a short sale. Seven long months!

The file is with the lender so it should not be much longer.

We are assured the deal is a GO but I still have doubts.

My short sale took nine months. The process was fairly fraught (Bank of America). BofA simply has stacks of these things to work through. This was an investment property, a great piece of property, well worth the effort.

I've done two short sale deals, both took between 8-10 months. But since both were investment properties (vacation properties) I wasn't too fussed about the wait.

I'd not want to do a short sale deal if this was my primary home unless paying in cash however. Too many variables, including tying up your own credit while waiting.

A lot of times house comes for sheriff sale ultimately. Has happened with three of the houses i made offers in the last one year. Of course got them cheaper there!

We've finally agreed with the bank on a price for our short sale purchase. I think we'll end up paying maybe 5% less than it would sell for as a standard transaction.

I'm happy that we're closer to completing the purchase, but I'd hoped to get more of a bargain in return for the 6 month wait. I guess the days of snapping up cheap distressed properties are over, at least around here (Jersey shore).

Of course the bank knows what they get for it if they foreclose, so I guess they're not very motivated to offer a discounted price just because it's a short sale.

Piggybacking onto my earlier comment.....I did get a bargain of a short sale (as I mentioned), but it took a lot, lot of work and patience. I am happy to have done it once, but probably wouldn't be that eager to do it again. You are at the mercy of the bank, and they do tend to dilly-dally....definitely on their schedule, not yours.

In may cases the note holder cannot hit up the PMI company for a short sale, so to them a foreclosure and some PMI may mean more money.

Often the lonas are not actualy owned by the bank you have to deal wth.

The bank is an agent to collect the payments and run an escrow account if required.

PMI companies often require an escrow account for taxes and insurance, one less chance for them to have to pay.

They bank is strictly a 'mortgage servicers' not owners of the actual loan.

THEY have to go to the holder of the note for final approval in many cases (though Freddie and Fannie sometimes provide guidelines that allow the note servicer to go forward if the loss is within the guidelines).

Thus far, my experience is good. On December 26th, we were 2nd back up offer on a short sale. On March 17th the buyer ahead us walked away just before approval. Our offer was too low for the bank to accept. We placed a higher offer which sellers accepted on March 19th. Bank approval came 4 weeks later and our closing date is May 17th!

December 26 to May 17 is rather low expectations of " my experience is good."

In response to brick eye: Our offer was accepted on March 19th, not December 26th. As a second Back-up offer, we ended up getting the house after 2 other deals fell through. Never thought we would end up getting the house! This was a good experience for us as our wait was only 2 months.

Pros of our short sale: saved about 10 percent under market value and got the perfect house for us. The buyers before us did most of the waiting and we were able to look at other houses until bank approval.
Cons: Waiting and not sure if bank would approve us

Short sales can be a good deal for someone who can wait and does not need to sell their home first. You need to be a positive person as well and be in for a long wait and a lot of unknowns. We will not be celebrating until we actually close. I have heard of deals not closing at the last minute.

Thanks brick eye for allowing me to clarify! :)

In response to brick eye: Our offer was accepted on March 19th, not December 26th. As a second Back-up offer, we ended up getting the house after 2 other deals fell through. Never thought we would end up getting the house! This was a good experience for us as our wait was only 2 months.

Pros of our short sale: saved about 10 percent under market value and got the perfect house for us. The buyers before us did most of the waiting and we were able to look at other houses until bank approval.
Cons: Waiting and not sure if bank would approve us

Short sales can be a good deal for someone who can wait and does not need to sell their home first. You need to be a positive person as well and be in for a long wait and a lot of unknowns. We will not be celebrating until we actually close. I have heard of deals not closing at the last minute.

Thanks brick eye for allowing me to clarify! :)

"This was a good experience for us as our wait was only 2 months. "

While that is like lighting fr a short sale, it would be at the outer edge for many conventional sales to close.