The Anatomy of Short Sales. Part 7 of 7: Final Closing Of The Short Sale

Once the seller and all other parties agree to the terms on the approval letter, the lender typically gives 30-45 days to close. This is a deadline, not a suggestion although in some cases, you may be able to request extensions.  If it is a HAFA file, the approvals are usually around 60 days and the banks state that there are no extensions (yet to be verified as we have always closed within the deadline).

During these 30 days the parties complete the purchase and sales contract and ownership of the title is transferred to the buyer.

Here are some things to look out for:

• Approvals should be sent to escrow so that the numbers can be verified.  Often, extra money is needed as banks are known to cut fees. For example, they will only pay for $750 of a $1200 title and/or do the same action for escrow.
• Taxes can be prorated. HOA’s can be owed more than allowed (as we submit a number for the HOA in the beginning and months later, more can be owed) – we advise HOA’s to be paid at all times even if mortgages are not.
• Also, sewage capacity charges are rarely paid and are often asked to be paid by buyers.  For these reasons and more you want to be sure Escrow reviews the Approvals for the numbers which will let you know what else may be needed.

Then timelines start from buyer’s receipt of the approval.  Timelines are dictated by the form 22ss. This form includes the agreement that the timelines for items such as the inspections and financing, will begin upon mutual acceptance.  After that, it’s a normal deal and closes as usual.

Short sales may be a long and difficult process to execute. However, once you have finally completed the sale, the financial burden lifted from your life will be worth it at the end. Assuming that you will be renting in the future, you will be cutting a plethora of expenses that come with owning a home which will thus allow you to begin saving and rebuilding credit to purchase your new home. Many who are still in their homes are in a financial rut of perpetual liabilities, debt, and interest. You however will have made a wise move in adjusting to the recession and building yourself up for financial victory in the future.

In my next post, I will provide tips and advice on vital steps to take after completing the short sale.

Next post: 1/9/12 – I completed a short sale. What should I do from here?

Peter