Do you know what the Foreclosure Timeline is? Do you know how it affects you if you are a seller? Or a buyer? Knowing where a home sits on the foreclosure timeline helps determine how long the short sale will take to complete. 

In a world where the bank processor’s desk is overflowing with short sale files, the foreclosure timeline helps him figure out which file to tackle first. Remember the bank acts in its best interest. The more pain it feels, the faster it works to remove the pain. Between a home that is not behind on payments (no pain), and a home that is behind on payment (pain), the bank processor will work on the file that is behind because that home has a foreclosure date looming. It’s a form of triage. A foreclosure is “critical” to the bank because that is when it must decide whether it will make more money by accepting a short sale or by foreclosing.

If you are a seller or buyer on a short sale, the foreclosure time line tells you how long you will stand in line for service. (You are number 10,257!) If a seller has not missed a mortgage payment yet, his file will be in line longer– until a foreclosure date is set.

There is a sweet spot for short sale processing. Right around the time a notice of default is mailed and the date of the trustee sale is set, the bank gets real interested in your file. Looking at the timeline below, we are talking about day 120 from the last payment on the mortgage.

This explains why many short sales don’t have an answer from the bank for 90 days and the real estate agents, sellers and buyers are freaking out. Once the process gets under way, most of it is centered on determining the actual value of the property. This is where a short sale savvy agent really helps the process come together. If the property is priced very close to “right” when it is listed, the values will line up between the appraisal, the offer and the bank’s expectations. The bank gives you a green light and you are on your way to closing. If the values don’t line up, well, that is a whole other blog.

In a nutshell, here is the foreclosure timeline:

Day one, you make your last payment.  Day 30, you miss your first payment.  Nothing appears to happen until day 90 when you receive a Notice of Default letter.  In another 30 days, (day 120) the bank files a Notice of Trustee Sale with the county.  Day 180 is the foreclosure sale. You must be out of the house 21 days after the foreclosure sale.

You can now make sense of what the heck is going on with the bank. It’s not personal…you’re standing in line. The bank is busy processing short sales on properties that have a Notice of Foreclosure Date filed. If an offer comes in on a home with a foreclosure date, the bank can delay the foreclosure in 30 day increments. (Up to a maximum of 4 times. Then they have to start their foreclosure procedure all over from the beginning. Hint: they probably aren’t going to go that far for you.) 

The take away from all this is that once you decide you must do a short sale, you have approximately 201 days before you have to vacate the property. And, the closer you get to foreclosure, the better! When an offer comes in on the property, the foreclosure timeline will indicate how long until the property comes up for active processing. If buyers, sellers and agents have a realistic view of the timeline, everyone can get on the same page and work together for a successful outcome.

Remember, your best bet is to find an experienced, short sale savvy real estate agent with a proven record of multiple, successful, short sales signed, sealed and closed.

I am one and would be delighted to put my skills to work for you!

Suzanne O’Clair, CSSS

• Certified Short Sale Specialist
• REALTOR

360-509-6400

Windermere Real Estate/West Sound IncPoulsbo/North Kitsap/Washington

oclair@windermere.com

www.oclair/mywindermere.com