There are several reasons why short sales fail. Here are some common situations that can make the process challenging for a short sale agent:
Divorce or Separation
Many couples who are separated or divorce are not on good terms nor will agree to cooperate to help the other with the sale. Do not take a side or put any blame on anyone. You need to be understanding to both parties and remind them of the end goal. Each party will have to be involved to some extend depending on their specific situation.
There is more than One Mortgage on the Property
All lenders must be considered in a short sale, regardless of how many mortgage liens there are. The first lender must meet an agreement with all the other lenders, because everyone will be taking a short payoff.
Additional Liens and Judgments on the Property
It is important to know about all the liens on the property, including HOA dues, property taxes, IRS, and city liens, because it can hinder the closing. Some liens may require a payment before the short sale can close. Work with the title company to get a clear title for the sale.
Listing Price is Too High
The price of the home is very important. The lender will want a full payoff, but the home has to be sold short, because the house has no equity. It is important to have an approved price from the lender that will sell in the current market, and also in its current condition.
Death of a Borrower
Depending on the situation, a short sale may not be possible. You need to find out whether there is a will, if the will has been probated, if it has to go through probate court, if all the heirs are going to cooperate. It can get messy when you have unhappy siblings and sensitive family problems.
If there is a foreclosure sale date scheduled for the property, then you need to work with the lender and foreclosure attorney to get the foreclosure postponed so that there is time for a short sale review. Every lender will have different guidelines to allow a foreclosure postponement, and it will also depend on when the sale is, the mortgage loan type, and the borrower’s loan history.
Give us a call to speak will a short sale expert for a successful short sale. We have experience and tips to overcome all these obstacles and more.