Wednesday, June 30, 2010

Getting Realistic about Short Sales

Whether you are a first-time/repeat home buyer or an investor, a short sale can be a great option for you and knowing about the short sale process can help make it a successful experience. The major differences between a short sale and a regular home purchase transaction is that short sales will most likely have a lower average sales price and they typically take longer to close.  More parties may also be involved than just the lender...such as additional mortgage investors or 2nd & 3rd lien holders.

A recent study showed that it took on average 62 days for the lender to respond to a Buyer's offer and another 67 days after that to close.  Here's a closer look at what a typical timeline would look like according to this study:

Day 1:  The homeowner misses a mortgage payment...or realizes that the house is worth less than what they may owe the lender.

Day 7:  The owner speaks to a Real Estate Agent and the Agent then prequalifies the property for a short sale.

Day 13:  The owner signs a listing agreement with the Real Estate Agent after receiving all the information about the homeowner's distressed situation.

Day 25:  The Agent submits all the short sale documents to the Lender.

Day 35:  The Lender creates a short sale property file.

Day 50:  The Lender assigns the property to an independent appraiser or agent for an estimate of value.  This is a good sign that the offer is being considered.

Day 65:  The Lender reviews the results of the property valuation.

Day 90:  The Agent receives a letter of sale approval for the property from the Lender.

Day 110:  The short sale transaction is closed and the property is sold.

Obviously, short sale timelines can differ from this one.  The most important thing to remember?  Patience!!  The payoff will be worth it in the end!

If you have any questions about short sales, please contact us or give us a call at 913.787.1870.  We're here to help!!

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