Short sale timelines

Wednesday, 18 July 2012
Earlier this year real estate grunts were pleased to hear that some of the big banks were going to streamline their short sale approval process. This was welcome news to me as dealing with the prolonged, nonsensical short sale process is one of the most frustrating parts of a buyers agent's life. Alas, it was not to be, at least not the intended result. The process may have been streamlined somewhere behind the lenders' curtain but out here on the front end, the period from contract to closing appears to be taking longer than ever.

I pulled stats for all closed residential short sales in Cocoa Beach and Cape Canaveral since May 1, 2012. There were 21 short sale condos, townhomes and single family homes closed in the period. Two of the 21 were previously approved and both closed in one month from contract date. Of the remaining 19 sales, the average time from contract to closing table was 118 days. Longest time was 270 days and shortest for a not-previously-approved sale was six weeks. Half took four months or longer.

Best case scenario for a buyer hoping to purchase a short sale is to find a property with an approved price that another buyer has walked away from. In the event of an unapproved sale, be prepared to wait for months often with no progress reports along the way. Buyers and their agents are at the mercy of the listing agent and getting status reports from some of them is akin to pulling teeth. I am in the fourth month on one short sale right now. Contract was submitted to the listing office first week of March with proof of funds with the contract which is normal with a cash offer. Six weeks later they informed me that "we are getting there" and asked for a more recent proof of funds. One month after that I am told "we are moving in the right direction". I ask if there is something more specific I can report to the buyer. Answer: "Yes, Once a processor has been assigned (next week, hopefully), the end will be in sight." One week later (eleven weeks in) I get a message that the BPO is being done. Five weeks pass with no contact from listing agent. I ask for another progress report. Listing agent informs me (16 weeks since initial contract) that she was told by the title company that we "should" be there in another 45 days.

As always with short sales, we're ready to close but our search for a property continues while the bank picks its nose.

"Not all information is beneficial." _____Ben Bernanke