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Short Sale Timeline – How Long Does a Short Sale Take?

A short sale is typically anything but “short” but some transactions close quicker than others. Many times it’s in the homeowners best interest to not have the timeline be extremely short in that it gives them time to save the money they would typically spend on mortgage payments. It also allows time to work up a plan of where to live next.

This is the time frame for a short sale:

The Short Sale Time frame
A short sale process can take 30-60 days from the date the offer is received and sometimes up to a year.  Several stages determine this time frame:

  • Day 1: Legitimate offer (legitimate means all needed documents are included, such as listing agreement, MLS listing, preliminary HUD-1 from the title company, hardship letter from the owner, and a signed purchase agreement) Your Maricopa short sale agent will help you collect all these ahead of time.
  • Day 2-15: Order appraisal
  • Day 15-25: Owner considerations: (owner to provide needed documentation to determine hardship and ability to contribute to the loss, this time frame depends on current owner’s compliance)
  • Day 25 – 30: Negotiate delegated decisions.  Non-delegated decisions will take an additional 30-60 days. Investors like Fannie Mae and Freddie Mac and insurers (FHA, VA, MI companies) have to approve the short sale before it can proceed.  Subordinate lenders (such as those who hold second mortgages)  must agree to accept a reduced payoff amount to release their lien.
  • Day 30 – 35: Approve or decline.
  • Day 35 – 80: Proceed with sale until closing.

Regardless of the buyer, the seller must be approved for a short sale and all the pieces must fit for the transaction to continue. At any point an offer can come unglued and the process start all over. The seller should try and make mortgage payments throughout the process because a short sale can turn into a foreclosure if not adequately taken care of. Each transaction is unique and specific to the lender, the seller and the buyer. Ask your Maricopa short sale agent if you come across any situation you don’t understand. We are here to help.