Why Banks Take So Long to Approve Short Sales (And How to Speed It Up)
If you’ve ever been involved in a short sale, you know the process can feel like waiting in the world’s slowest line — except instead of coffee at the end, you’re hoping for lender approval. While the delays can be frustrating, understanding how banks work behind the scenes can help you navigate the process more effectively (and maybe even shave off a few weeks).
The 3-Step Short Sale Process
Step 1: Qualifying the Homeowner
This is where most delays happen. Before the bank will even think about the offer on the table, they have to confirm that the homeowner qualifies for a short sale. This means proving a legitimate financial hardship — think job loss, medical expenses, divorce, or other life events that make it impossible to keep up with the mortgage.
The lender will also require a hefty stack of documents, which can include:
- Hardship letter
- Recent pay stubs (or proof of unemployment)
- Bank statements
- Tax returns
- Mortgage statements
- HOA statements (if applicable)
The challenge? Many files stall here because the bank won’t move forward until every single document they request is in their hands. Missing one form or an outdated bank statement can send you right back to the start.
Pro Tip: Gather all the required documents before you submit anything to the lender. Sending a complete package from day one can dramatically speed up Step 1.
Step 2: The Valuation
Once the bank agrees the homeowner qualifies, they order a valuation to determine what the property is worth in today’s market. This is usually done via a Broker Price Opinion (BPO) or a full appraisal.
Valuations are important because they set the lender’s expectations for what they’ll accept. If the valuation comes back close to your offer, you’re in good shape. If it comes in high, you might need to challenge it with better comps.
The good news? This stage usually moves faster than Step 1. A BPO can be completed in a few days, and a full appraisal might take a week or two.
Step 3: Offer Review and Decision
Finally, the lender reviews the offer. They’ll weigh the net proceeds against the property’s value and decide whether to accept, counter, or reject it.
If everything’s in order, this step can wrap up surprisingly quickly — sometimes in a matter of days. But if there are multiple lienholders, HOA debts, or unresolved title issues, you could be looking at more delays.
Why Each Step Gets Faster
The reason things usually speed up as you go is simple: the bank has more invested in the file. Once they’ve confirmed hardship and spent money on a valuation, they want to see it through. Plus, later steps involve fewer moving parts — no more chasing down pay stubs or hardship letters.
How to Keep the Process Moving
If you want to avoid the dreaded “file under review” limbo, here are my top tips:
1. Get organized early. Gather every document the bank might ask for before you even start.
2. Double-check everything. Make sure forms are complete, signatures are in place, and nothing is outdated.
3. Respond quickly. If the bank asks for an update or additional info, send it the same day whenever possible.
4. Work with someone experienced. Short sales are full of small details that can cause big delays if missed.
Bottom Line
Short sales can be slow, but they don’t have to feel endless. By preparing a complete file upfront, you can get through the toughest part — Step 1 — faster, which sets the pace for the rest of the process.
If you’re tired of waiting on hold with the bank and chasing paperwork, that’s exactly what I handle every day. I make sure short sales move from start to finish as smoothly (and quickly) as possible — so you can focus on the deal, not the delays.