Another Short sale question!!!?

Question

Sorry folks! OK - so I found out that the seller's bank (I am buying a property in a short sale) just ordered the BPO and they are going to look at the house tomorrow. Any estimates on how long after this is done (assuming the value is similar to my offer) will the transaction close.

(I have all my financing in place) Thanks for any insight!

Answer 1

Most loans can close in 30 days if all the paperwork is in order.

Answer 2

From the time the bank accepts the amount of the short sale offer, they want as short an escrow as possible. About 20% of short sales end up in foreclosure before the short sale is completed (according to an article this weekend in the San Diego Union Tribune). That's because the short sale process can take a long time (longer than the 3-1/2 months after a notice of default when the foreclosure becomes final). And, many lenders are requiring sellers to be in default before a short sale is approved (to make sure they're serious about their hardship). But, it's more expensive for a bank to put a proerty through foreclosure than a short sale. So, they want to make it work.

Expect at least a month, though, because of the title search, disclosure forms and contingencies to expire, etc. Plus, if there's tenants, they have to be given 30 days to move out.

I just bought a short sale rental condo. I made the offer on July 1st and it closed escrow July 31st. I then got a notice of a foreclosure auction on the property to occur on August 28 at the county courthouse (that's when the foreclosure would have been final - the escrow company said to ignore it - we have a clear title). So, we got in just under the wire.