As the market rebounds, short sale activity is increasing lately, but these transactions can take up to three times longer than a traditional transaction. A lot of things can go wrong in that timeframe.
These are the most common delays, according to a recent article by George “Gee” Dunsten, a real estate broker and president of Gee Dunsten Seminars.
Be sure to do a title examination at the beginning in order to identify all individuals on the deed and mortgages – and determine all lien holders.
Lack of communication with the lender
Lost documents and misunderstandings commonly cause delays. Make it a habit to follow up with the mortgage servicer twice a week to prevent entirely avoidable problems.
Delaying the start
Some short sales don’t begin until a contract to purchase has been initiated, but this can add up to two extra months to the process. The lender won’t even look at a buyer contract until a seller candidate for a short sale is approved and the market value has been determined, Dunsten says.
Make sure you carefully submit all documents completely and accurately. Submitting incomplete packages is another common cause of delays. All homeowner financial information needs to be kept current and forwarded to the servicer every 30 days if possible, says Dunsten.