Why do short sales take so long?

**GoddessChick** · 09-10-2010, 12:05 PM

Frustrated potential buyer here.

Most of the homes in my price range (I'm only approved for up to $200 K for an FHA) are short sales but from what my realtor tells me, these could take months or even years to hear back from the bank if your offer is accepted or not and even longer before you ever make it to closing. I don't have that kind of time.

WHY??????? Why aren't people and the banks more in a hurry to sell?
When I started my housing search last spring, all I heard was how it was a "buyers market" and how desparate homeownerw and banks were to sell real estate - but I'm finding that is NOT TRUE in Maryland. At least not for us poor working saps. Maybe for those who can afford $400 K or more but not in my category.
I can't find diddly squat.
Oh yea, I could buy some piece of ghetto mess in dangerous neighborhood with crappy schools - but no thanks. I'm sorry but the safety of my family is not worth that risk.

Also - the empty foreclosed homes we've seen - ? - yea, most of those are in such bad shape they would never pass for an FHA.

I'm really getting desparate and exhausted and feel bad that I've dragged my agent around and across 5 counties. My fiance and kids and I are in a bad way, stressed, depressed, and the kid are currently living in a really bad place. I need to get them out yesterday.

I work in Columbia (government employee) and need to be somewhat close to work.
My fiance has 4 kids and we will all be living together as the other parent has abandoned them.

I can't find squat.
I need 4 beds min to hold 6 people (2 of whom are teens) to keep us sane.
Gotta be under $200 K - preferably $190 K and FHA insurabale.
If anyone knows of a place, let me know but my agent and I aren't having much luck.
My fiance and I tried looking in BOWIE because we knew someone there but the schools are downright trashy and dangerous there too like the res of PG county so a big NO on that one.

But I do occasionally see homes with potential listed but they are all SHORT SALES!

What is going on? Why are the banks making it so HARD for people to BUY?
Why does this BS have to be so complicated?

I just want a safe home and I need it now.

AAARRRRRRGGGGGG!!!!!

Thanks for letting me vent. Feel free to respond.
I'm lost and depressed.

G

**Greg** · 09-11-2010, 09:16 AM

Short sales don't take years. 8-9 months are the worst stories I have heard.

Don't expect the banks to operate with common business sense like other businesses have to in order to survive. The banks get rewarded for screwing up.

**ChadPederson** · 09-11-2010, 04:17 PM

8 to 9 months is the absolute longest it takes. I've gotten short sales approved in as little as 2 weeks.

One of the reasons banks don't rush through short sales is because it reduces their capital ratio. As soon as a bank approves a short sale and takes less than is owed on their mortgage, their capital ratio takes a hit. Granted its not a few houses that make a big difference to the large banks. But being there are millions of homes that are in pre-foreclosure (payments are late), they are exposed to the FDIC. As long as a bank shows the appraised value of the home on their books, their capital ratio is good. So its not in the bank's best interest to approve short sales.

Another aspect is the how willing a seller is to go through all the paperwork hassles. Many times we run into sellers who thought they were willing to jump through the hoops to get a short sale and at the end of the day they are happy enough to let the house go into foreclosure, just to not have to deal with the bank.

One a positive note for you, short sales are able to be had at a lower price than a standard seller that has equity in the home. Its just about the waiting game.

Good luck!

Chad Pederson

**TeamAguilar** · 09-12-2010, 12:08 AM

I think you ended up looking at homes with lazy sellers or a huge debt houses with more value which might be a great loss to the bank,choose the house wisely and wait patiently,if you keep jumping from place to place you might not get one soon.so find one and stick it out.