Basically, here in Arizona, if you put an offer in on a short sale, you can expect a minimum of a 3 month wait for a response from the seller’s lender.  The response might be yes, no or some sort of counter offer.  During the wait period there’s not usually a lot of information that get’s passed from the seller’s lender to the listing agent (or to the buyer’s agent).  Much is done internally at the bank and a lot of information is not disclosed.

Here are some things that we can typically count on:  When an offer is submitted to the seller’s lender, it’s submitted along with a “short sale package.”  The package consists mostly of the seller’s financials, including taxes, bank statements, income expense sheet,  etc…  The main point of the short sale package is to reverse qualify for their mortgage.  In other words, they’re trying to prove that they can no longer afford their mortgage.  After the short sale package is submitted, there is an appraisal done on the home (many times referred to as a BPO).  Once they’ve received the appraisal and short sale package, the lender will then start processing the paperwork to make sure the entire package is complete and that the offer is in line with the actual short sale market value.  Typically after that, it’s sent through one or more quality control negotiators to make sure that everything truly is in order.  Then, typically after that the entire file will be assigned to a negotiator who will then review the file and obtain/update any missing or outdated documentation and fit the file within the guidelines of the investor that holds the Note on the property.  The investor is the actual lender that makes the decision on whether or not a short sale will be permitted.  Once everything is in order, the entire package is submitted to the investor for final approval.  If the investor approves the short sale, the bank will issue an approval letter and buyer and seller can move towards close.

That’s the process here in Arizona, in a nutshell!  Many things can happen between buyer’s offer and closing, and every short sale is different.  The above is just the basic framework.