Mr. Seller,

We started this short sale process quite awhile ago, It’s been almost 4 months since our first listing consultation.  We have spent a great deal of time and effort focusing on the ‘almighty bank approval’ and now that we have received that approval I thought I should give you an idea of what to expect next.

What Happens Next?

Now that we have received approvals from both lien holders (banks) we will notify the buyers in writing of the  banks approval.  The Buyers will then start their ‘due diligence’, or inspection period.  During this  time, the buyers will most likely have an inspector that will perform a 2-3 hour general inspection of the property.  The buyers also may elect to have additional specialized inspectors out (i.e. for roof, or pool, A/C, etc…).  All of these inspections will usually occur during the 10-day inspection period which starts the first full day after we notify the buyers that we have bank approval from both lien holders.

Why the inspections if they agreed to take the property “AS-IS?”

Even though the buyer has agreed not to ask for the repairs they want to make sure they can live with the property in the condition that it currently is in.  If they find the property needs more repairs than they are willing to undertake, then the buyers do have the right to cancel the contract and have their earnest money refunded.  (Fortunately, you have maintained your property very well, and in the event that they did  back out, we have plenty of other buyers that bid on your property that would be thrilled for another chance – so no worries for you here!).  In addition to the inspection, the buyer’s lender will need to have their own appraisal completed to insure the property value warrants the loan they will be giving to the new buyers.  This appraisal usually occurs after the inspections have been completed, but occasionally the buyers will elect to have this completed simultaneously.

When Do We Close Escrow?

There are a few things to consider when determining the date of your Close of Escrow (COE).  The short sale addendum both parties signed with the contract stipulates that the buyer and seller will close 30 days from bank approval; however, a simple addendum to the contract signed by both parties can modify the close of escrow to better suit everyone’s needs.  What CANNOT be easily modified (or modified at all in most cases) is the Banks expiration of their approval.  The banks approval will have conditions and one of those is that the home/transaction closes no later than __<insert date>__.  This expiration date from the bank will be our number 1 governing factor when it comes to choosing a close of escrow date.  Normally the banks will give the buyer and seller about 45 days to get the property closed.  As your Realtors, Julie and I will recommend trying to close at least a week before that bank deadline, just so that we have a little ‘wiggle-room’ in meeting the banks expiration date.  Occasionally things get help up at the last minute (buyers loan being held up, paperwork needing to be re-signed, etc) and we don’t want the transaction to be in jeopardy because we didn’t have the foresight to allow a couple of days leeway.

Hope this helps and is not too confusing.  Remember Julie and I will be here to walk you through the process and keep everybody on task!