Why Do Short Sales Take So Long To Complete?

For the homeowner anxious to complete a short sale and move on with their lives, the long, drawn out short sale process can feel like an eternity. Regular listings close approximately 30 days after listing on average – faster if it’s a hot market. Real Estate short sales on the other hand, take between 3 months to a year on average from offer to closing. Why do short sales take so long to complete when compared to regular home listings?

Short Sale Process

To better understand why the short sale process takes so long, it’s important to have a bird’s eye view of the overall short sale process. The short sale process starts with the hiring of the listing agent – the Realtor who will handle your short sale. This is perhaps the most crucial component of a successful short sale. While there are many otherwise good Realtors who can take on your listing, short sales are a niche, complicated area of Real Estate that requires specialization. You’ll want to find a short sale Realtor with a significant amount of experience in short sale transactions and working with your lender who can ensure that every step of the short sale process is completed expeditiously.

Your Realtor will then put your home on the market, similar to the way they would for any other home sale. Buyers will submit their offers, and if a suitable offer is submitted, your short sale Realtor will submit the offer to your lender, along with the listing agreement, the buyer’s financing preapproval letter (if required), earnest money deposit, and your short sale package. At this stage, the short sale approval process begins, and the waiting game begins for you as the homeowner. However, the ball is not entirely out of your court if you have an experienced short sale specialist working for you.

As your bank processes your short sale package and the buyer’s offer – which may take several weeks or even months – your Realtor will be negotiating with your lender, and pushing the short sale process forward. If your lender is satisfied with the contents of your short sale package, the buyer’s offer, and the terms your short sale specialist has negotiated, then you will receive approval to proceed with the short sale. Once the bank has granted short sale approval, the rest of the transaction closes like a regular listing, provided the buyer’s financing is still in order. With the lengthy short sale approval process, sometimes a buyer’s financial situation can change drastically.

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