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Not Even Nostradamus Could Predict the Short Sale Time Frame

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.

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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.

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Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.



  1. Fred Romano

    July 13, 2010 at 8:58 am

    Oh to be a fly on the wall in the short sales department of BOA! LOL

  2. Durrell

    July 13, 2010 at 10:33 am

    What about the new HAFA guidelines?

    • Melissa

      July 14, 2010 at 1:34 am

      That’s a great question. The guidelines and the reality are still not one and the same. Some of my recent experiences have shown me that banks are still in the HAFA ‘learning phase.’

  3. Sheila Rasak

    July 13, 2010 at 11:43 am

    Not only is each lender (generally speaking) different in proceedure, but they’re only as good as the person (negotiator) behind the desk. I dealt with BofA recently and had an issue come up with his verbal approval (even though we went through Equator) on them paying off the 2nd. Several attempts were made to clarify why my approval letter came in without the said approval. At the end of the day, I was informed that he had been on the job only since May, but I’ve been informed that this is a common occurance at BofA. Their worksheet typically does NOT match the approval letter in relationship to their payoff on the 2nd lien holder.

    Now there’s Ocwen. Sent file via fax….all 98 pages. Faxes received, file marked incomplete. When I called to see what they needed I was told to send another Exhibit C. I tracked down my seller (in the hospital) got signatures from both he and his wife and sent it via fax THAT SAME DAY. Called again on the file the next day…was told the file was incomplete. They needed Exhibits A, B and another statement. Really? And why wasn’t I informed of this the first time I called? The property is distressed, deferred maintenance, I have an all cash offer in a neighborhood that’s clearly declining (1st lien holder asked ME to pay for apprasial report that won’t be reimbursed).

    And yet, I still love my job.

  4. Brad Officer

    July 13, 2010 at 5:32 pm

    I’m seeing a minimum of 60 days on Short Sale Approvals. I have a local attorney that has a staff of 9 that handle all contact and process with the banks, which helps keep me in marketing mode vs. on hold with the bank.

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