Short sales are notorious for lasting longer than conventional property sales. This is a disadvantage to all parties involved in the process, from the agents to the seller and the buyer. Understanding the reasons for the lengthy period can help you prepare for them and possibly reduce the short sale duration. Here are some of the reasons short sales take such a long time:
They Involve Endless Documents
The number of documents involved in a typical short sale is staggering, and they all need to be accurate. Noticing an error in such a volume of documents isn't easy despite the fact that it is relatively easy to make a mistake in a case involving hundreds of documents. Here is an overview of just a few documents needed for the process. Note that most of these documents run several pages long, and each page has its own significance. A good example is Closing Disclosure document that is five pages long and contains the final details of the mortgage selected by the buyer.
It Must Be Reviewed By the Lender
This is another thing that may complicate and lengthen the process. As you know, your transaction is not the only thing that the bank will be working on at a time; it will be handling multiple complex transactions at any given time. The lender has to review your finances to confirm that you truly can afford to pay the mortgage and must sale the house; don't forget that the bank will be losing money in the process. The lender also reserves the right to ask for additional documents whenever its representatives think there is a need for them.
Some Documents May Need To Be Updated
Since the short sale process is so lengthy, it is possible for some of the vital documents to become outdated before the process is complete, and this lengthens the short sale process even further. For example, your financial situation or the buyer's financial situation may change before the end of the process, which means the bank will need to review your current financial situations. Another example is when your bank statements become outdated and the bank has to review the outdated ones.
Multiple Lenders May Complicate the Process
A short sale involving one lender is already complicated enough, imagine how complicated it will get when multiple lenders are involved. In such a case, both lenders have a say in the sale process, which means they both have to review the seller's and buyer's documents.
Speak with a local real estate agent for more information.