Quick Answer: What Happens If Bank Does Not Accept Short Sale?

Who pays liens in a short sale?

In a short sale, you sell your home and for less than the outstanding mortgage balance.

The lender agrees to accept the proceeds from the sale in exchange for releasing the lien on the property even though the amount is “short” of paying off the debt.

Example.

Say you owe $400,000 on your mortgage..

Why would a short sale be denied?

A short sale is sometimes denied due to something as simple as the seller being current on paying their mortgage. The bank’s guidelines might state the bank isn’t allowed to approve a short sale if the mortgage payments aren’t in arrears.

What happens if a short sale does not sell?

Unfortunately, if your attempts at short selling your home fail you’re left with a home you’re struggling to afford and no way to sell it. When short sales don’t pan out, homeowners still have foreclosure avoidance options, including deeds-in-lieu of foreclosure.

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

about 60 to 90 daysFrom that point to the time of short sale approval, the average timeline is about 60 to 90 days. It means 30 days to sell + 60 days for approval + 30 days to close escrow = 4 months, on average.

Will the bank take less on a short sale?

It’s the last bullet point that banks care about when they decide to preapprove a short sale. … A buyer may offer less but the bank might not accept it. However, if the buyer does offer the preapproved price, the short sale will be approved, provided the buyer qualifies.

How often do short sales get approved?

Some banks get approvals in less than 30 days, while other banks’ short sales can sometimes turn around in 24 hours….Normal Waiting Period.Bank acknowledges receipt10 to 30 daysBank orders a BPO or appraisal2 weeks to 2 monthsThe file is reviewed2 to 10 business days3 more rows

What happens after a short sale is approved by the bank?

If the lender approves the offer, the short sale moves forward. If the lender does not accept the offer, the buyer may counteroffer or end the process.

Who benefits from a short sale?

What are the benefits of a short sale?Eliminate your remaining mortgage debt.Avoid the negative impact of foreclosure.Receive relocation assistance in some cases — up to $3,000.Start repairing your credit sooner than if you went through a foreclosure.More items…

Is a short sale good for a buyer?

Short sales are a mixed bag for the buyer, the seller and the lender. If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. … A lender may even require a buyer pay additional closing costs that might be normally assigned to the seller.