How Long Does a Short Sale Take? What to Expect When You’re Buying Short
When you’re looking for a new home, the process can feel endless in even the most efficient, straightforward of circumstances. Between searching for, viewing, negotiating, inspecting, and possibly renegotiating on a home, the road to the closing table is rarely a short one. And if the house you’ve landed on is listed as a short sale, you could be in for a long ride.
Though short sales aren’t as prevalent today as they were following the Great Recession, they’re not impossible to find, and buyers can still find good deals. To navigate the short sale process, you’ll need an experienced real estate agent and lots of patience.
Together with top agents Laura Sanders of Coral Springs, Florida, and Bob Wisdom of Elgin, Illinois, we’re exploring the question of how long a short sale takes, particularly the time needed for each step in the process, helping you understand important considerations along the way.
What exactly is a short sale?
A short sale happens when a homeowner has fallen behind on their mortgage payments and is approaching foreclosure. In a short sale, the homeowner owes more on the mortgage than the house is currently worth, and the bank has agreed to accept a lower price to satisfy the debt.
A short sale can help a seller avoid foreclosure, and — more importantly — short sales can offer real relief to a struggling homeowner.
These sales take time because the bank is an active third party in the process. It isn’t just a matter of buyers and sellers coming to an agreement with the help of their respective agents. The bank has to approve the price and conditions of the sale.
This means that the seller needs to prove adequate hardship to justify a short sale, while a buyer needs to be qualified to make the purchase and remain flexible on the terms of the deal.
Short sales are usually as-is sales, so inspections will generally be for your own reference rather than a tool for negotiating. And because there’s so much paperwork involved, and banks can take weeks (sometimes months) to process files, it’s essential that both sides stay vigilant with follow-ups.
