Short Sale, a Way to Avoid Foreclosure
A short sale is typically not a fast process, and setting the right expectations with Pensacola sellers and buyers is essential. Unlike a traditional sale, where buyer and seller terms are agreed upon, and the process moves along smoothly, a short sale requires lender approval for the reduced payoff amount.
Here’s what you should know:
- Lender Approval Takes Time: The lender needs to review and approve the sale price and conditions since they’re accepting less than what’s owed. This process involves a lot of back-and-forth and can take weeks or even months.
- Document Verification: Lenders need extensive documentation from both the seller and the buyer, including financial hardship information from the seller. Each document is carefully reviewed, which can slow down the timeline significantly.
- Multiple Parties Involved: Besides the lender, there may be secondary lienholders, mortgage insurers, and other stakeholders. Each party involved must sign off, and if one party delays, the entire process can stall. If there is a second mortgage or a lien against the property or owner then this will add more time to the process.
- Market Conditions Can Affect Approval: Lenders will want to ensure that the price they’re accepting reflects market conditions. This often involves multiple valuations like a Broker Price Opinion (BPO) or appraisal, which add time. The lender will hire an appraiser to provide a certified appraisal. My experience with Pensacola appraisers is the appraiser does not know he is doing an appraisal for a short sale
- Legal and Compliance Reviews: Short sales often have legal and compliance checks that a standard sale doesn’t require. This ensures all actions comply with federal and state regulations, further extending the timeline.
If you are facing foreclosure let’s connect, go to my Calendly link.