"Why Do Short Sales Take So Long"
What is a short sale? A short sale occurs when the lender accepts less than what is owed on the mortgage to end the foreclosure process. Some lenders take two weeks and others take over 6 months.
The purpose of this statement is to temper the expectations of the buyer on a short sale offer.
You must allow for a reasonable amount of time for the transaction to take place. Often it can be 30-90 days before you receive information from the bank and 30-60 days after to accept an offer. Communications between the buyer's agent and the bank is not possible. Therefore, you need to rely on your buyer's agent to receive communications from the seller's agent on a periodic basis. You should expect to get biweekly updates even if there is no new information to report.
The Short Sale Time Line Upon Ratified Contract
Day 1-15 An offer is received by the Estate Representative and submits the package (if complete) to the lender.
Day 16-30 Lender receives full packet and the file goes into rotation to be assigned a negotiator. Once a negotiator is assigned, a BPO (broker price opinion)
is ordered to help the lender determine the property value.
Day 31-45 Once the BPO has been completed and returned to the negotiator, they will have 15-30 days to review the file and determine if the offer is in line with their Market Valuation. If the offer is accepted by the lender, the file is forwarded on to the Investor/Mortgage Insurance Company. They may return a counter offer or the offer may be rejected.
Day 46-60 Investor/Mortgage Insurance Company either returns the file as an approved file, giving it authorization to close, or they will return the file as a denied file and require a counter offer. If the file is approved, the approval will only be good for about 30 days.
Day 61-90+ If a counter offer is received, the Investor/Mortgage Insurance Company can take another 15-30 days to review. If the counter offer is accepted, an approval will be granted and closing will be possible. There are times when the Investor/Mortgage Insurance Company will refuse a second counter offer and the file will either be closed until a new offer is received or the Investor/Mortgage Insurance Company may decide to take the property through the foreclosure process.
Know your Option
Maryland State Guidance
Maryland Real Estate Commission