Wht does a short sale take SO long?

I do not believe that an offer placed today on a short sale will be able to close by the end of June. It just takes to long.

The seller does not have the power to sell the home without getting the seller's mortgage company and any other lien holders to agree to allow this sale to go thru. None of the lien holders are a party to the contract so they can refuse at the very last moment to co-operate and the whole thing can fall thru. You would then be back at square one.

I would avoid short sales in most circumstances.

Look for the best home for the money that is not a short sale. Do not ignore homes being sold to settle a divorce, people getting transferred, foreclosures, people selling because of a death, or illness, or job loss, or any other reason. Those homes may be at a great price and in very good shape.

You got your accepted contract in before the 4/30/10 deadline, but don't count on bank approval so that you can close by 6/30/10.

Short sales take forever because

1. the banks are backlogged

2. often the home is not yet in foreclosure so the bank is not too motivated to move on it or accept a low purchase price.

Bear in mind that by its very nature a short sale is selling for less than the seller owes on the house. So the banks are very reluctant to approve these because in effect they are forgiving a certain percentage of the loan they have underwritten. Sometimes the amount they recover on the loan amounts to pennies on the dollar.

Not a good deal for the bank or its shareholders.

As a Realtor, I try to discourage first time home buyers from getting involved in a short sale.

Although the conventional belief out there among first timers is "buy a foreclosure or short sale and you'll get a good deal".

Homes sell for what comparable homes in the neighborhood have sold for, so odds are that another home for sale with no short sale or foreclosure issues is going to be almost as good a deal with far fewer headaches.

I hope that in your purchase offer you had a closing deadline.

If so, and just to cover yourself, ask your Realtor to start showing you other homes in that price range, NOT short sales.

Good luck

Who told you it would take forever for the lender to accept? It is after all a short sale so they aren't just going to stamp & agree, it has to go through several channels first. And the escrow process can take a while because short sales are a pain to deal with and usually when the owner is in default on their house they have other liens against them as well that need to be resolved. It's a lot of work tracking down people who have placed liens on them & then getting their demand for payment & then negotiating a smaller amount normally with attorney's involved, etc. It's not a wham bam type of deal, people are losing a lot of money on a transaction like that so don't expect everyone to just jump at the opportunity to be shorted out of a ton of cash they're owed. As for the credit, I have no idea but I'm sure you can find that info online.

This is the risk you take when you make offers on short sale properties. It can take MONTHS for the seller's lender to respond. I hope that you included a deadline contingency clause (for the seller's lender) in your offer.

You will be able to buy much faster if you look for REO properties as the banks are motivated to get those off their books.