Short Sale Approval Letter Time Frames Are Tough to Predict
I had a call a week or so ago from an agent who had some questions about short sales and short sale negotiations. I get a lot of these calls as a result of my posts, and also because our office provides administrative services to agents who prefer to spend their time in the field and not on the phone.
The call went something like this:
Me: How can I help you?
Agent: I have a short sale and someone told me that you can help me with the short sale negotiations. I’m wondering how long it will take you to get me a short sale approval.
Me: I’m sorry. I cannot really tell you how long it will take to obtain a short sale approval. Each bank has different time frames and slightly different procedures. And, within each bank, time frames may be different depending upon who the investor (note holder) is on the borrower’s loan.
At this point, the agent became very irritated. She was disappointed that I could not give a concrete time frame for a short sale approval. This agent began to question whether I could make a guarantee. Like the tire on an automobile, she stated, I ought to offer a guarantee.
Veteran short sale listing agents and short sale negotiators know that nothing is certain when it comes to short sales. Each and every mortgage lender has slightly different procedures and policies. For example, if the seller has a Wells Fargo Home Equity Credit Line in the second position, Wells Fargo will require a copy of the approval letter from the first lien holder before processing the short sale. In this case, even if you obtained a short sale approval from a first lien holder in three weeks, you would still have to add an additional three to four weeks to obtain that second approval letter.
Before I began my sojourn into the field of real estate, I used to express extreme dismay with my Realtor® husband. I used to wonder how it could be so difficult to get a real estate transaction to close in a timely manner (and this was before short sales). However, once I began to work in the field of real estate, I learned that a transaction requires the involvement of so many parties in order to close—a buyer, a seller, a buyer’s lender, a buyer’s agent, a listing agent, a title officer, an escrow officer, etc. If one of these individuals cannot get the job done, this impacts the performance of the group.
Throw into the mix of this team all of the individuals who must approve and/or work the short sale on the part of the mortgage lender(s); this could involve multiple negotiators and bank personnel. Who knows whether some of these folks might be in vacation or at an office meeting? And, if it is winter and the bank is in the Midwest, who knows…there might be a snowstorm so great that the employees might now make it to work.
There are so many moving parts to a short sale transaction that it would be practically impossible to determine how quickly a short sale lien holder approval could be obtained. Veteran short sale negotiators could probably wager a guess based on their experience with a particular mortgage lender and their contacts at the lending institution. However, no tarot cards or Magic 8 Ball—not even Nostradamus could predict the short sale approval time frame with certainty.
