The Delay Aspect of Short Sales – An Overview

‘Every delay in finance is profit to someone and loss to someone else,’ goes the famous finance based mantra. When it comes to short sales, this aspect almost gets hidden and is oddly not even highlighted by bloggers. The delay can range from a month to even a quarter of a year. Well, it depends on both the parties. The worst part is that the borrower’s credit history is affected and the fines start accumulating.

Why Lenders Refuse Short Sales?

With short sale marketing on the rise, there are experienced real estate brokers everywhere, even on the internet. Lenders get into mortgage with borrowers for a profit and there are certain ‘terms and conditions’ which are decided and set. No sane lender will accept a short sale on a loan which is current, if they do, everyone will try to get away with the process, thereby creating a percentage loss for the lender (difference between the obligation amount and the market value)

Hence, lenders at least wait for a couple of installments to default, some wait for a longer time. All these aspects trigger holdups and delays.

Steps in this form of process (delay) include:

The Offer with Detailed Information
Reviewing
Acceptance or Rejection
Negotiations
Short Sales Initiation
Prior to short sales, borrowers often utilize short sale marketing methods to promote their properties. Later, pre-short sale starts with the borrower applying for a short sale with the lender. During the offer, borrower has to supply documents which has details like bank statements, wage details, property value opinions etc. The lender has these details reviewed thoroughly; later he may or may not accept the sale amount.

Likewise, both the parties may settle on a different amount (often referred as the dollar amount) after a series of negotiations. All these processes which appear quick on paper, often take a couple of months, or even more. Also, there is possibility of a situation where the lender never consents to short sales; the lender is not obliged towards a short sale.

This delay swells the loan amount and impacts the credit history, and worse, in case where negotiations fail, the borrowers are often gifted with the Notice of Default (start of the foreclosure process).

On the whole, all borrowers who are eying for a short sale should keep these aspects in mind while doing so.


Realtors with proper short sale training are well versed with all the aspects of short sales. This article provides an overview into various issues which often lengthen the process of short sales.