By now, you’ve probably heard all the horror stories about buying or selling a Minneapolis duplex that’s a short sale.
Most likely, all of those stories included references to the extreme length of time they take to close.
And if you’re anything like me, you’ve wondered what the banks are doing that’s taking so long.
Last week, I received an excellent outline that answered exactly that question. It came from the local firm, Christensen Law, which negotiates short sales on behalf of duplex sellers.
I thought it was worth sharing.
Step 1: Weeks 1 – 4 – Lender Package Review
The lender reviews a package submitted to them by the person representing the seller. This package includes the purchase agreement, financial documentation explaining the seller’s financial situation, and a hardship letter from the seller, stating why they are no longer able to own the property.
Step 2: Weeks 4-5 – Package Assigned to a Negotiator
The file is assigned to a negotiator after the lender has reviewed all the documents. The file then goes through another level of review.
Step 3: Weeks 6-8 – Broker’s Price Opinion (BPO) Ordered
The listing agent is contacted by the lender to arrange a time for someone representing the bank to gain access to the duplex in order to give them a price opinion. It usually takes 5-10 days for the BPO to be returned to the lender.
Step 4: Weeks 9-10 – Lender Review of BPO
While the lender is reviewing the BPO, they may request more documentation from the seller, or create a counteroffer.
Step 5: Weeks 11 – 16 – Final Approval
The file is submitted to the investor for final approval. The investor, in this instance, is the party who the seller actually owes the money to. For example, while the seller may be making payments to Wells Fargo, they may simply be collecting the money on behalf of Fannie Mae. When approval is obtained, the title company prepares the final HUD statement, which is submitted to the lender for approval. Once approval is received, the title company schedules the closing.