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Why might a short sale take a long time?

A short sale can be an effective way to move a piece of property, but one complaint about short sales is that they can take quite some time to go through. Below are a few reasons why.

1. Banks need to go over all of the documents and assets. The idea behind a short sale is that the value of the property is below the total owed, so the sale is proposed for under that total amount. Banks will allow this, but they do their homework. They need to see financial documents from both sides. To a large degree, the bank wants to make sure that the seller doesn't have money on hand that could pay off the property at the total amount owed.

2. New documents may be needed. This happens for a few reasons, one of which is that lost documents can slow the process down. In addition, since the process takes a long time, certain documents may become outdated along the way. For instance, earning statements turned in up front may be too old by the end, and the bank will need new statements to see current income levels.

3. Twice the paperwork is needed with two loans. A typical home purchase isn't as complicated, with one new loan being given out that pays off the value of the other loan; sellers who own their homes don't even have loans to consider. In a short sale, there are almost always two loans, which just makes the process slower and more complicated.

If you're considering a short sale because it's the best financial option, be sure you know how it works and what can be done to streamline the process in South Carolina.

Source: Zillow, "Why Do Short Sales Take So Long?," Brendon DeSimone, accessed March 18, 2016

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