The way that most lenders handle short sales is very weird. They have a strange policy of demanding that all home buyers close on their home purchase within 30 days of them approving the short sale. The sad truth is that you can only push home buyers so hard. On a traditional sale many people wait two and six months for their home to sell. Most buyers agree to close within 30 days.
The biggest reason for a closing delay is because the lenders want more documentation from the buyers. They want to make sure that the buyer is qualified for the loan. It's part of the lending business. It sometimes happens to buyers who the lenders had said were "pre-approved." So the reality is that everyone wants to close within 30 days. But, the party holding up the closing is often the buyer's lender.
Most agents and home sellers agree to wait until the buyer's financing comes together. The alternative is to put their home back on the market and wait another 2-6 months for it to sell. You can beat the buyer over the head and punish them for not closing on time. You can say, "If you don't close by X date, then I will sue you for your deposit and I will not sell my home to you."
But that will not force the buyer's lender to close any faster. The buyers usually get angry. They will probably hire a lawyer and fight to get their deposit back. Then they'll go buy another home. Most parts of the country have thousands of homes to pick from. They will have an easy time finding another home to buy. Sure, you may sue them for their deposit. But, the extra time waiting for another buyer usually isn't worth the aggravation involved. So, why does this matter to you if you are short selling your home?
The bottom line is that new federal lending regulations have caused the lending process to take more like 45-60 days. Some lenders have been able to close within 30 days but most still take 45 to 60 days. As a result, your short sale Realtor will probably have to ask for an extension on the short sale approval. Short Sale Lenders don't like to approve extensions.
They think that if they start allowing 60 days for a short sale to close, then all short sales will close in 60 days. The person at the bank isn't selling his own home. He still gets paid whether or not the home sells. They are insulated from the reality of what it is like to actually sell a home. If the sale is delayed you will need a good, experienced short sale Realtor to make the case for the lender to extend the short sale approval until the sale closes. If not, then you will have to cancel the sale, resell the house, re-negotiate the short sale and go through the entire process all over again.
Now, do you see why an inexperienced agent would think that short sales are difficult? The good news is that an experienced short sale agent is usually able to convince the lender to extend the closing until the buyer is able to close.
The biggest reason for a closing delay is because the lenders want more documentation from the buyers. They want to make sure that the buyer is qualified for the loan. It's part of the lending business. It sometimes happens to buyers who the lenders had said were "pre-approved." So the reality is that everyone wants to close within 30 days. But, the party holding up the closing is often the buyer's lender.
Most agents and home sellers agree to wait until the buyer's financing comes together. The alternative is to put their home back on the market and wait another 2-6 months for it to sell. You can beat the buyer over the head and punish them for not closing on time. You can say, "If you don't close by X date, then I will sue you for your deposit and I will not sell my home to you."
But that will not force the buyer's lender to close any faster. The buyers usually get angry. They will probably hire a lawyer and fight to get their deposit back. Then they'll go buy another home. Most parts of the country have thousands of homes to pick from. They will have an easy time finding another home to buy. Sure, you may sue them for their deposit. But, the extra time waiting for another buyer usually isn't worth the aggravation involved. So, why does this matter to you if you are short selling your home?
The bottom line is that new federal lending regulations have caused the lending process to take more like 45-60 days. Some lenders have been able to close within 30 days but most still take 45 to 60 days. As a result, your short sale Realtor will probably have to ask for an extension on the short sale approval. Short Sale Lenders don't like to approve extensions.
They think that if they start allowing 60 days for a short sale to close, then all short sales will close in 60 days. The person at the bank isn't selling his own home. He still gets paid whether or not the home sells. They are insulated from the reality of what it is like to actually sell a home. If the sale is delayed you will need a good, experienced short sale Realtor to make the case for the lender to extend the short sale approval until the sale closes. If not, then you will have to cancel the sale, resell the house, re-negotiate the short sale and go through the entire process all over again.
Now, do you see why an inexperienced agent would think that short sales are difficult? The good news is that an experienced short sale agent is usually able to convince the lender to extend the closing until the buyer is able to close.
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