Not all short sales are made the same. Banks have extra incentives these days to approve short sales, so what used to be a 5-10 month process has now been shortened to 2-5 months. To figure out which stage of the growing process your short sale is, we can compare it to a fruit:

Green:
The property has just been listed on the market for not too long.
The agent probably has not submitted any paperwork to the bank yet and is in the process of doing so. Depending on the efficiency of the agent, this stage can take up to a month. These properties should be set aside because this is the most volatile time. It is uncertain whether or not it will be approved, or if the owners will even go through with the short sale.

Growing:
The property has been listed for a little while (1-4 months, depending.)
The property is awaiting approval, depending again on the efficiency of the agent, we can’t tell how long exactly this will take. It is best to leave properties in this stage alone until it gets approved, since we cannot measure the time.

Ripe:
The property has been approved or just weeks from being approved.
Yummy! Just right for the picking! If you find these listings, it means that you can buy NOW! No more waiting, it’s like finding an REO home and getting the bargains of a short sale.

Rotten:
The property has been out on the market for over a year.
It has either not been approved yet or the price is way above market value. The agent may not have had the skills sets to get it approved efficiently, or the lender is not working well with the borrower. Either way, these properties are dead-ends and should not be dealt with.

With everything, there are great deals and rotten ones. Short sales normally take an extremely long period of time before it is successful. There are too many out there that are not properly handled; some agents let a short sale grow stale for months, maybe even years. By the time the short sale is approved by the lender, the approved price is way over market price.

This is why I filter out the short sale listings in your automated emails that are anything but ripe. Let’s find your dream home in the most efficient way possible, and weed out all those properties that are not ready for the picking.

Chapter 7: Extension on First-Time Homebuyer's Tax Credit