A typical short sale can take 30-45 days from the time the offer is received. Several factors can contribute to this timeframe.
- Timeframe to obtain appraisal.
- Timeframe to obtain the necessary financial documentation from the borrower to determine hardship and ability to contribute to the loss.
- Many investors (Fannie, Freddie etc) and mortgage insurers (FHA, MI companies, VA) do not delegate the short sale decision to the lender. The decision requires their explicit approval.
- If there are any 2nd or 3rd liens, there must be a negotiation with their holders to accept a reduced payoff to release their lien.
- When there is a large loss or other just cause, an identity search is done to ensure an arm’s length transaction.
Upon successful approval, another 30-45 days is often required to close escrow on the sales transaction and receive payoffs.