Q: I made an offer on a property in Holme Circle that is a “short sale.” It has been six months and still NO REPLY from the seller’s bank! The real estate agent told me it could take awhile, but now I feel like she is not doing enough. Is she giving us the run-around? How do I know if the bank ever really got my offer? How long is this really supposed to take?
A: Despite its name, a “short sale” is anything but short. The short part of short sale means the seller is not paying off the entire loan, and lenders don’t easily approve of that. For the buyer, it would be more accurate to call it a “Take-forever-and-even-then-you-might-not-get-it Sale.” That is the main reason why these homes are priced much less than others in the market.
One problem is that no standard process exists for any short sale. As many different banks there are that lend money, there are that many variations of how a short sale can play out. Any given mortgage lender has made up its own “process” for each and most are not quick to get it done, many as a result of their own internal defects.
For a real estate professional, it takes time and skill to get a short sale approved. The process is laden with sticky red tape. Many calls, many faxes, many requests and sometimes starting all over again will take place until the real estate professional is assigned a “negotiator” from the bank. This can take weeks, months, and in some cases years, depending on the lending institution.
There are real estate professionals skilled at short sales, there are agents that use a professional “short sale negotiator” to do it, and there are some agents that are just muddling through trying to figure out their first short sale. None of these agents can get it done quickly, though in most cases, no matter how experienced. And sometimes even the most skilled short sale professional can’t get a short sale approved at all with some banks. Surely it’s not for a lack of trying since there is no way to be paid if the home never sells.
Your choices are to either get out of the deal, or wait it out. If you choose to get out, expect to pay more for the same house in the same neighborhood, but you’ll know within two days if you got it, and you can probably be in your new home before Christmas. If you choose to wait it out, it could really pay off because you might get the deal of a lifetime on the home of your dreams.
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.