The purchase of a short sale is very similar to the purchase of any other property. But, sometimes it takes a bit longer. So, before writing an offer on a short sale, it is a good idea to become more familiar with the process.
When you find a property that you like, you will write your offer with the help of your Realtor®. The offer is then submitted to the listing agent who presents it to the seller. If the offer is accepted by the seller, it then needs to be sent to the mortgage lender for final approval. This is where the process sometimes gets a little bit foggy.
Once the offer has been sent to the lender(s), the actual Short Sale process can take anywhere from 2 weeks to 4 months. This timeline varies with each lender.
After the lender reviews the Short Sale package, a BPO (Broker Price Opinion) will be ordered by the lender. This is similar to an appraisal, and once the lender receives the report, a final decision will come shortly thereafter. The lending institution orders the BPO so they can figure out what their net proceeds will be (how much of a loss they will be writing off).
Buyers must be patient throughout this part of the process. At times it may feel things are going slowly, but remember this is not a regular transaction and can take longer to complete. Bank employees have hundreds of files to review, and this is why the process is so slow.
Once an offer has been approved by the lender, it is time to proceed to close the transaction. The lender may demand to close escrow in anywhere from 10-30 days, so buyers must be prepared. If a buyer does not close by the lender’s deadline, the next highest bidder in line may be accepted.
NOTE: If the buyer(s) cannot perform and close on time, the lender may decide to proceed with foreclosure thus severing the opportunity for all parties involved to complete a successful transaction.
We hope this information helps you to keep stress at a minimum during this process and as you prepare for the future. While short sales can be frustrating, they are usually a great deal: they are in better condition then foreclosed properties, and there is wiggle room for negotiations!
We can help buyers throughout San Diego North County and beyond to locate and purchase the properties they desire in a quick and efficient manner.