Short Sales how long do they really take in AZ? (Chandler: foreclose, insurance)

[nicoleeee]

Short Sales how long do they really take in AZ? Can someone plz give me a honest anwser? How do they actually work? What is the process? Appreciate all info.

[LovinAZ]

We put an offer in on a short sale in mid-February and closed on that house in mid-July, so 5 months. Our realtor said that was about average, some are faster and some completely fall apart.

As far as the process, we put in a offer, homeowner accepted. Then it went to the banks, they had it appraised, accepted our offer, and we closed.

It is pretty much like a regular sale, except the bank also has to approve the sales price. They may also have other stipulations with the seller to approve the deal. The worst part is waiting for answers from the bank.

[Skywayy2001]

The worst part is the banks rarely accept the sales price.

[Captain Bill]

Short sales can take 3-6 months.

I've had fairly good success with them, but they can be very frustrating for the buyer.

Recently my client had waited 3 months for a short sale to be approved. The date of the trustee sale came, and the bank did not extend the deadline. We were notified that the home was sold at auction after we worked on the deal for 3 months.

There are positives and negatives to short sales. While some will get a bargain, others won't. Many people underestimate the amount of money they will have to put into a property to get it into move-in ready condition.

With some computation, in may cases, it's easy to see that it's better to pay $250,000 for a move-in ready home from a regular seller, and move right in, rather than to pay $225,000 for an equivalent home that needs $25k work to bring to the same move-in condition.

The process is not difficult, and your Realtor can explain that to you as you begin to look at properties. It's the waiting and uncertain outcome that is the problem.

[Zippyman]

I can only comment on my own experiences, but I think the 3-6 month timeline may be a little short.

The wife and I bought a short sale earlier this year, we were the 4th buyers to put the house under contract. The first three buyers bailed due to delays & uncertainty. From the first offer to when we actually closed on the property was over a year, though as the 4th buyers, we only had about a 60-day wait.

We have another home under contract right now.

We wrote the offer on that property February 24th.

The lender sent us a "counter-offer" which we accepted, signed & returned the next day on August 12th.

Last month, the mortgage insurance company came back and required us to sign an addendum agreeing to close by December 30th (which we signed and returned the same day).

But they never sent us a written "approval" letter.

We can't apply for a mortgage until we have approval letters from both lenders and the mortgage insurance company.

And a mortgage still takes about a month to process -

sooo..

unless these banks get their act together in the next couple of days, we will be forced to go back to each of them and re-do the approval process again.

The seller has been calling them every day for several months now.

They don't answer the phone, nor do they respond to voicemails or emails. "Escalating" the case just makes things move slower.

The listing agent is a peach.

She did everything right, every request they've made has been answered promptly, the "packet" has been sent, lost, ignored, re-sent, and re-ignored multiple times by a slew of "servicers", "negotiators", "asset managers", "loss-mitigation specialists" who make the government look efficient.

Seriously, if these guys were the post office, a letter would arrive promptly three years after mailing it, and stamps would cost $250 each.

I can't imagine a retail buyer being able to write an offer nearly a year before they need a place to live, nor can I imagine living under the "maybe we're moving, but maybe we aren't" cloud for that long.

As an investor, it's not a big deal, I have a great house to live in.

If the deal closes, I'm happy - if the bank forecloses, I'll be at the Trustee's sale and probably get it for less (with even more hassle though). And the banks have never sent that all-important "Notice of Trustee's sale", which means they legally could not foreclose until February... at the earliest.

Sooo... based on MY experience, I could not recommend a short-sale to a retail purchaser. I'm not sure they're worth the hassle for investors either - there have been bank-owned properties that have come up that I've ignored because I had this one "under contract", and in retrospect that may not have been the right decision. YMMV...

[Jkgourmet]

Just to add to the confusion, in the last ten months, I have had two acquaintances who sold homes with a short sale. One in Chandler, one in Gilbert!, both nice well-maintained properties under $200K. (cash buyer)

One closed 35 days after it was listed. The other received several offers in the first 60 days after listing. Finally the seller accepted an offer, the bank agreed in les than two weeks, and it closed 30-40 days later. (not a cash buyer)

[AZPam]

I really think it depends on the bank. While BofA is one of the worst to deal with, my brother used to be a short sale negotiator for them, so he knows the ins and outs very well. He just got one approved for me in less than a month and we closed 3 weeks later, so less than 60 days, start to finish.

Another Realtor in my office heard about my experience and hired my brother to negotiate one she had been working on for over 2 years with BofA. They will close the end of December.

I honestly don't think this is a right or wrong answer for the OP's question. It just depends.

[dbrooks411]

Shortsales here take too long and a pain