Property Clinic: how long does it take to close a house sale when a bank is involved?

Your property questions answered

With so many stakeholders involved, the process can take far longer than a normal private sale between two private individuals

With so many stakeholders involved, the process can take far longer than a normal private sale between two private individuals

 

I put in an offer on a property that has bank involvement. Although our offer was submitted months ago – and the estate agent told me he informed the vendor via a third party of ours and the next highest bid – we still haven’t heard back from the vendor’s third party. They claim the bank hasn’t gotten back to them. How long does it take approximately for a sale to close when a bank is involved in the process? I hear that the process is very long. Is there anything I can do to expedite the process or is it a matter of just waiting?

Unfortunately, distressed bank sales have been and remain a substantial proportion of overall property sales. The major banks have been actively seeking to deleverage their distressed loans. In most instances they will appoint a receiver to oversee this process who in turn will typically appoint an estate agent to offer the property to the open market with a view to the best price being achieved. With so many stakeholders involved, the process can take far longer than a normal private sale between two private individuals. The estate agent should have told you this from the outset.

It is not entirely clear from your question whether the property that you have made an offer for is in receivership or not. You refer to the property having bank involvement which I take to be a distressed sale but this may not be the case.

The sale may require bank consent as the outstanding mortgage secured against it may be higher than the likely market value. In this instance, the vendor will have to reach agreement with the bank about the residual debt following which the bank may consent to the sale proceeding. You refer to a third party – again it’s not clear as to who this may be.

In terms of the typical length of time that may be required to close a bank sale, there is no clear cut answer to this. Every case is different and the specific circumstances which prevail will determine the timelines. However, it is safe to assume bank sales can frequently take considerably longer than a private sale which may be eight to 12 weeks. Unfortunately there is little you can do as purchaser to speed this process up.

I would however advise you to make sure all of your due diligence has been done in terms of conducting a survey, making sure you have a formal loan offer and your solicitor has been instructed to deal efficiently with the contracts should your offer be accepted.

Gerard O’Toole, is a Chartered Residential Agency Surveyor and member of the Society of Chartered Surveyors Ireland, scsi.ie