Last year, in my Los Angeles neighborhood, the majority of short sales were not closing. However, this year, according to Cracker Jack escrow officer Kristen Hartwick – most of her short sale escrows are closing – however average closing time is four or more months; the lender’s approval to sell short can easily take four or more months.  Of course if the owner has additional liens such as a second or even a third, the buyer's odds of closing, decrease and approval times will increase.

Some savvy Realtors approach the lender/owner prior to marketing the home – and the lender owner preapproves the short sale.  This means that the buyer should not have to wait for a long drawn out approval process.



The question: Is the real estate still market declining? If so a four month approval process will work against the buyer.  Why agree to today’s price in a declining market.

If the market has bottomed –then locking into today’s price may be a great strategy for the buyer. But which buyer wants to wait four months to know (because you need lender approval) whether or not they are buying the home?  What if interest rates increase? 

Please remember the short sale lender has stockholders or a government entity  they answer to, they need to sell the property for market value, they order appraisals. You won't be a buying a million dollar home for $900,000.  The last short sale I negotiated was listed @ $999,000 - my client was countered at $1,040,000 (my client passed).