For home buyers who are waiting to hear back on an offer to buy a short sale property, it’s been a lot like waiting for a personal letter from Santa. Many folks lose faith long before it happens. I know buyers who made offers on more than 20 homes and still were not home owners. That’s a lot of time and effort, for both them and their real estate agents. Now Freddie Mac (the Federal Home Loan Mortgage Corp, a government sponsored enterprise) aims to improve this situation by shortening the time.
The company that handles the current home owner’s loan (the servicer) now has 30 days to make a decision on your offer — if they have the authority to do so. However, if a different bank actually holds the loan note so that the servicer is required to pass it along, they have 60 days to respond.
Yes, waiting two months is better than waiting six to twelve months, as happened so often last year, but it’s still a long time to put your life on hold while you wait in suspense. By contrast, a private party selling a home will typically respond to your offer within one to three days.
Servicers are required to acknowledge receipt of your offer within three days, so at least you know your offer didn’t fall into a black hole or get eaten by a dog.
If the servicer ends up needing more time than 30 days to review your offer, they must provide you with a weekly status update.
Why should it take a month or more to decide whether or not they’re willing to sell for the price and terms of your offer? One scenario is when they want to wait to see what other offers might come in. Another scenario is that it takes a committee of bankers to approve a short sale; and frankly, getting that one property off their books is not a priority for them.
If your dream home is a short sale situation and you don’t mind waiting a month or more with the understanding that your offer might not be accepted, then proceed with patience. But if you don’t have the time or emotional endurance for a long haul to close, then speak with your Realtor about limiting the homes you preview to ones that are owned by private parties.