Truckee Real Estate - Why Banks Reject Short Sales

Why Banks Reject Short Sales ~
Truckee Real Estate ~ Banks demand a overabundance of documentation before approving a short sale. Contrary to popular belief, sellers do not need to be in foreclosure or have fallen behind in making mortgage payments, for a short sale to occur. The most prevalent reasons banks turn down short sales offers:Short Sale Offer Price is Too Low Banks will request an appraisal, and may also order a broker price opinion. When the listing agent submits the short sale offer, the agent should also include a comparative market analysis that justifies the price in the short sale offer. If the bank believes it can make more money by taking the property from beginning to end foreclosure proceedings, the bank will most likely reject the offer. The Short Sale Package is Deficient Ask any short sale specialist and you’ll hear shock stories of how banks lose documentation. In some cases, it doesn’t matter how many times the package is expressed overnight or faxed; the bank might be unable to find it. Worse, an important document might not be in the file, and without every single required document, the sale will not be granted. The Seller May Not Qualify If the seller is asking for debt forgiveness, the bank will want to see a hardship correspondence from the seller that explains why the seller cannot afford to pay back the shortfall difference. Sellers who have taxable assets are at a disadvantage if the sellers are unwilling to work out a repayment plan with the bank. The Buyer Does Not Qualify A desire to buy a home and the financial means to afford a mortgage payment does not mean a buyer qualifies to buy a home. A buyer’s lender will examine credit history, length of time on the job, debt ratios, and a host of other criteria to determine a borrower’s qualifications. To gain credibility with the seller’s bank, buyers need to submit a loan prequalification letter along with the offer, but a loan approval letter carries more weight. Dickson,
Truckee as well as our other offices have completed numerous short sales transactions.  It takes patience, knowledge and proper documentation to bring a short sale to a viable conclusion for both buyers and sellers.  Give me a call – I can help – Bonnie 530 412 3984.

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