What Is a Short Sale?
Short sales happen when a lender agrees to accept a home sales price that is less than the balance of the mortgage. It might look like the sales price is high enough to cover the mortgage, but if it fails to sell for enough to cover the mortgage plus the fees for selling the home, it falls into short sale territory. In some cases, the seller may have two home loans that need to be paid off. For example, the seller might have a primary mortgage plus a home equity loan. If the seller has taken out two loans, both lenders must agree to accept a short sale.
Be Skeptical of Short Sale List Prices
The list price of a short sale home generally has little bearing on the actual price a bank may accept. The list price may be too high to attract an offer or too low for the bank to accept. Some agents advertise short sales at unbelievable prices, hoping a buyer will be enticed to submit an offer. Just because the seller accepts the offer doesn’t mean the lender will, though.
5 Reasons Why Banks Reject Short Sale Offers
Lenders require a significant amount of information before approving a short sale. Contrary to popular belief, sellers don’t need to be in foreclosure or have fallen behind in making mortgage payments for a short sale to occur. A short sale agent who has sold hundreds of short sales can give you a sense of whether your short sale offer will be approved. Other agents might not have that ability. Here are five reasons that lenders turn down short sale offers: To have the best chance of short sale success, the seller should be in regular contact with their lender(s) and the buyer should present a reasonable offer.
