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When does the clock start ticking in a short sale?
We are waiting to hear back from the seller's lender (Everhome Mortgage). Originally the mortgage company said it would take 30 to 45 days to make a decision. They've had our information for about a month, but just assigned a negotiator two weeks ago. At that point, the lender said they would order a BPO, which would take about a week, and then they would make a decision. So, now it's two weeks later and the seller's Realtor is telling me that it will be 30 to 45 days from the time the negotiator is assigned. Does this sound right? What will happen with the closing date set for July 15th? We only have about 3 weeks until our loan rate & insurance quote expires as well.
David, The seller supposedly was in contact with his lender about a BPO before we made an offer on the house 5 weeks ago. The home has been for sale since late February and has gone from $234000 in asking price to $169000.
Our bank ordered the appraisal about 4 weeks ago. I'm checking on the status of that today. So it could be 30 days for a decision and then another 30 until closing? Oh goodness!
The appraisal has not been done by our bank. They are waiting on final approval from the seller's lender. Makes sense. There is no reason to pay to have an appraisal done on a house that cannot be purchased. Our lock-in rate expires July 24th. The bank says we can extend the rate, but there is a fee for that and the longer the extension, the higher the fee. I feel like I'm in a time crunch!
2 Answers
- David ZLv 71 decade agoFavorite Answer
I am 57 days into a short sale.
It has been 57 days since lender received our purchase offer. BPO's have been done about 3 weeks but still no answer.
yeah it sounds about right. You cannot set a closing date until you hear from lender. And then they typically require 30 days to close. Then all of a sudden the bank is in a hurry.
I doubt you will make the July 15 date. Even if you heard this afternoon I doubt your lender could close in 15 days! They may not even have appraisal back by then.
- goldshire1Lv 51 decade ago
Something is not right about the situation. When you submit an offer on a short sale the seller (owner) can accept it but it does not become a valid purchase contract until the bank accepts it as well - i.e. they assign a negotiator, order the BPO and decide what price they will take for it. The time frame for that part of the process varies lender to lender and then the actual closing date will be set.
Because there is no guarantee as to how long the short sale approval process will take, it is best to hold off until AFTER they approve the sale before you proceed with your loan. That way you aren't worried about rate locks expiring or paying for appraisals on a property that may or may not get short sale approval.
