Why Do Short Sales Still Take So Long?
2026
The term “short sale” can be misleading. The truth is, many real estate agents call them “long-and-drawn-out sales” because they can seemingly take forever to close. So why do short sales still take so long? Three reasons:
1. You’re dealing with institutions, not individuals. In a short sale, you need the seller’s bank to approve the short sale. And they require dozens of pages of paperwork in order to do so. Banks want to be certain the seller is indeed incapable of staying in the home and can’t afford to pay off the difference between its market value and the bank’s loan amount. With so much money at stake, banks don’t want to rush through the process. In a traditional home sale, you buy from an individual, who is usually motivated to keep things moving along quickly.
2. If one thing gets lost, it can reset the clock. Banks require many documents, disclosures and signatures to close a short sale. If just one signature or page is missing from a file, the bank will call it an “incomplete” file and hold up the process. At the same time, banks know they’re losing money on short sales. So they don’t allocate the same amount of resources they would to the customer service department, which is where they make their money. The result: With limited staff and lots of paperwork, things tend to get dropped along the way, causing the short sale process to drag on. And on.
3. You’ve probably got two lenders involved. Often, the seller of a short sale has two loans. The larger loan is the one being ‘shorted’ while the second, smaller loan—typically a home equity line of credit—is being erased. Often, these loans originate with two different banks. Each one has its own system that doesn’t communicate with the other bank’s system. The second bank may approve the short sale, but its approval expires within 30 days. Should the first bank’s approval come in at day 31, the seller has to return to the second bank and start all over.
So how do you make a short sale truly short? If you’re the seller, go with an agent with short sale experience. The agent will know the potholes ahead and can navigate around them. When you’re the buyer, try to find out if the listing agent has short sales experience. If the agent lacks short sales experience, there’s not much you can do except prepare yourself for a long, rocky road.
