I'm thinking about making an offer on a home in Olathe, Kansas that is a short sale. How long does it take to close a short sale?

Question: I'm thinking about making an offer on a home in Olathe, Kansas that is a short sale. How long does it take to close a short sale?
Cathy L. from Overland Park, Kansas


Answer: Great question, Cathy. Since no two short same, I will address many types of short sales. A short sale that has been approved by the sellers lender should take 25-45 days to close. A short sale that has not been approved by the lender can take 45-6+ months. What delays a short sale that has not been approved by the lender is the lender will need financial docs from the homeowner. In addition, the lender will need to communicate with the investor(s), lien holders and insurance companies. The more entities that the lender needs to communicate with, the longer it will take to close. I'll give you a couple examples.


Example 1: The homeowner has an on the ball short sale representative and the lender has approved the short sale prior to getting an offer. Now home buyer comes around and makes an offer and wants to close within 30 days. The likelihood of this happening is very good.


Example 2: The homeowner has hired a short sale representative to present the short sale to the lender. The short sale representative waits until an offer is received before they present any docs to the lender. Once the docs are presented, the lender request financials. During the process, the lender needs to communicate with their investor and PMI insurance company. Also during the process the short sale representative finds out that there is a home equity line of credit and a tax lien on the property. The short sale representative will need to present a short sale request to the home equity line of credit lender as well negotiate with the IRS regarding the tax lien. The buyer wants to close within 45 days according to the contract. Best guess, it will take 3-6 months minimum to close this contract.


Hope you get the idea. All short sales are different.


Have questions on negotiating a short sale whether you are a homeowner or buyer, contact the Dowell Taggart Team. We have experienced negotiators who can handle your needs.




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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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