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Short Sale Timeline

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Short Sales can taken an awful long time to complete, making it frustrating for both the buyer and seller involved in the situation.  Many sellers and buyers of short sales want to know, the timeline to complete the short sale process.

Not all banks or lenders are equal, some are much quicker than others but on average the time the offer is sent from the listing agent to the bank, Realtors can expect to hear back between 45 to 90 days to respond.

When an offer is sent on a short sale home, make sure the listing agent sends all the required documents.  Many of the banks have an overwhelming amount of short sale requests to process and do not have the employee power to quickly process each and every one of them.  If the short sale package is not put together correctly, it will only delay the process that much more.  There are some great short sale deals on the marketplace but be clear to yourself that they can take a long time to process and a short sale buyer must need an open ended time frame to get the home, in the majority of cases.

What is the Timeline for Countrywide Short Sales

Short sale time lines with any lender can vary greatly from as short as two weeks to longer periods exceeding 2 to 3 months to receive a response on the initial offer. Typically, when the bank responds, lenders like Countrywide will counter with either a higher price or change/modify demands made in the initial purchase offer.

Currently to muck up the short sale already long time line, Countrywide has a new short sale approval letter. It now attempts to retain the right to invalidate a “transaction for events which may have occurred at the loan’s inception or in transaction”.

The condition reads as follows:

“If the property was acquired by any means of fraud, [lender’s name] reserves the right to pursue any and all actions available to it to pursue any and all actions available to it to offset its losses. If it is determined that Sellers and/or Buyers participated in any way to the fraud, this short sale will be void, and the Note and Security Instrument will remain in full force and effect.”

The title insurance will not be issued to the buyer or the buyer’s lender if Countrywide can say after the close of escrow that the money is still due. Due to this issue, and the fact that there is no workaround to this provision, anyone who receives this approval letter from Countrywide will need to advise them that the condition must be remove, in writing, or the short sale cannot close.

Don’t be surprised if more lenders try to add these conditions in lender’s agreements. If there is any type of provision like this one, which allows the lender the right to refuse re conveyance after the close of escrow, do not close without legal approval.

Most importantly, get a good title company to handle the short sale and consult an attorney and/or experienced short sale Realtor when going through a short sale.

As far as GMAC, it appears they have quite the list of rules for short sales:
1) Full financial short sale package is sent from the borrower
2) Typically Maximum commission to real estate agents is 4%
3) GMAC will only accept shorts sales within 90 to 100% of fair market value of the property
4) There will be no closing cost credits to the buyer
5) GMAC will typically decline low offers.
6) GMAC will require that you use their Authorization to Release Information to be signed and notarized. The original is to be sent back.