Venturing into a short sale can be a multifaceted journey, encompassing numerous stages, considerable paperwork, and differing timelines. Yet, gaining insight into this procedure can minimize anxiety and pave a more straightforward route towards resolution. This page serves as a guide to help homeowners unravel the complex process, breaking it down into easily understood phases from the initial listing to the final closure. Do remember, each deal is distinct, and the duration of each phase may diverge based on personal situations. Let's explore this comprehensive guide and journey through the short sale process collectively.
Estimated Timeframe: Depends on the homeowner and listing agent
This phase marks the commencement of the short sale journey, typically occurring before the property appears on the MLS. Transactions at this juncture may not possess all necessary documents for a thorough short sale processing. Essential financial paperwork, brokerage listing agreements, engagement contracts, or other miscellaneous prerequisites relevant to the particular deal may be absent.
Estimated Timeframe: 5-10 business days after receiving all documents
Once we've received all the initial documents from the homeowner, we dispatch the "Third Party Authorization to Communicate" to every relevant lienholder. Following their approval, we verify essential details such as loan payoffs, delinquency status, foreclosure status/dates, HOA dues, and tax liabilities. An exhaustive title search is also conducted to discover any undisclosed mortgages or judgments.
In this phase, we also evaluate the homeowner's qualification for specialized short sale programs provided by FHA, HAFA, Bank of America, or Chase. If the homeowner qualifies, we file a short sale initiation request, with or without an offer. If they do not qualify, the short sale transaction advances to the subsequent phase.
Estimated Timeframe: Subject to the timing of offer submission
During this phase, we lean on the listing agent to secure a feasible offer for the property. We carry out regular follow-ups every three weeks, monitoring the status of each mortgage account and any foreclosure proceedings initiated by the bank. For HAFA short sales, we additionally relay the marketing data from the listing agent to the bank.
Estimated Timeframe: 21 to 45 days
Once we receive a fully signed contract, complete with all necessary addenda and documentation, it's promptly forwarded to the appropriate lienholders. During this phase, the bank establishes the homeowner's short sale eligibility, verifies the submission of all required documents, and carries out property appraisals. After these responsibilities are fulfilled and a negotiator is assigned to the case, we proceed to the fourth stage.
Estimated Timeframe: 10 to 14 days
In this phase, the designated negotiator examines the complete file, spots any omitted documents or transaction concerns, and establishes the minimum sales price acceptable to the bank/investor. If the buyer's offer aligns with this minimum price, it's accepted. If it doesn't, the offer might be declined, or a counter-offer could be proposed. Once a consensus is reached, the negotiator presents the file for final approval, propelling us to Stage 6.
Estimated Timeframe: 10 to 21+ days
This phase kicks off when the short sale file is verified to be submitted for final approval. This phase may encompass additional assessments from third parties or quality control audits. Depending on the transaction, Stage 5 could signify that verbal approval has been achieved. If verbal approval is secured, written approval is typically obtained more than 95% of the time.
Estimated Timeframe: 30 days post-receipt of written short sale approval by the buyer
This phase initiates once we acquire an error-free and acceptable written approval letter for the homeowner. The bank establishes a stringent timeline for closure, usually within 30 days from the date of written consent. At this juncture, the buyer must be ready to move swiftly. If we can't seal the deal by the set deadline, an extension will be necessitated, which can be a lengthy process and isn't always assured.
