How long does it take for bank to approve short sale?

Need an Offer Contingent on Lender Approving the Short Sale

In most cases, the short sale process doesn’t begin until after an offer is received on your Palm Beach County home.

Additionally, an addendum will be attached to the contract which outlines the timeframe the Buyer and/or Seller agree to wait for the Short Sale Lender(s) to approve the short sale. 

Appraisal / BPO

The lender(s) will need to establish a value of  your Palm Beach area home. They will either hire an Appraiser who will provide an Appraisal or they will hire a local Palm Beach Realtor to provide a BPO or a Broker’s Price Opinion. The home sales in your area along with the condition of your property are taken into account in order to provide an estimate of what your home would likely sell for. 

Offer Review

The lender(s) will review the offer and the BPO. Understand, that the Lender will require the offer under consideration meets the current market value. 

Buyer Qualification

The buyer must provide a prequalification letter or proof of funds. 

Hardship

The Homeowner usually must demonstrate some type of hardship which impacts how long does it take for bank to approve short sale as the Lender will need to review documents submitted by the Seller of the home. 

The seller of the home must demonstrate hardship and provide financial documentation. 

Arm’s Length Transaction

The sale must be an arm’s length transaction. The lender(s) will review the contract to make sure the parties involved in the sale are acting independently.  

Mortgage Investor Must Approve

The mortgage investor must approve each offer.

Third Party Approval

Third-party approvals are needed from all investors and lien holders, for example mortgage insurance and home equity. How many parties are involved can have a big impact on how long does it take for bank to approve short sale.