Why Was My Short Sale Declined?
Most Metro Atlanta Short Sale Realtors agree that a short sale can be a long and frustrating process. Unfortunately, more short sales are declined than are approved,oftentimes after months of waiting for a final decision from the bank.
There are many reasons why a short sale may be declined. One of the most common reasons that a short sale is declined is that the bank determines the homeowner does not have a true financial hardship. This determination may be the result of an incomplete financial affidavit submitted by the homeowner or may stem from the fact that the homeowner has liquid assets or a surplus at the end of each month.
Another reason a short sale may be declined is that the homeowner does not provide all the paperwork required to review his or her short sale request. Oftentimes, a bank may request the same documentation multiple times before the short sale review process ever begins as well as during the review process.
A short sale may also be declined if the parties are unable to agree on terms. The bank may determine that the property is worth more than the buyer offered and counter the original offer made by the buyer. If the buyer refuses to accept the counteroffer, then the deal cannot proceed. Additionally, the bank may impose conditions on the homeowner, such as signing a promissory note or making a financial contribution to the deal, that he or she will not agree to.
Another common reason short sales are declined is the existence of junior liens. Many homeowners fail to disclose the existence of a second mortgage, home equity line of credit, judgment lien,homeowner's association lien, or tax lien when they first list their property. Although these types of liens will be discovered by the closing attorney's title search, if title is not run until a few days before closing, it may be too late to negotiate a settlement and obtain short sale approval from the junior lien holder. Additionally, some junior lien holders, especially judgment creditors and second mortgage holders, may demand payment in full before they will agree to release their lien on the real estate.
A short sale may also be denied because of an inexperienced, disorganized, or uncommunicative listing agent. If the listing agent does not provide the bank with all of the documentation submitted to him or her by the homeowner or fails to respond to requests from the bank or to communicate those requests to the homeowner, the result could be a denial of the homeowner's short sale request.
No matter what your situation is and no matter what you do, there is no guarantee that your short sale request will be approved. However, there are few things that you can do to improve the chances that it will be approved. In my next post, I will reveal a few tips for increasing the likelihood that your short sale will be approved.
If you are considering a short sale and have questions, please give me a call at 678-446-5925.
There are many reasons why a short sale may be declined. One of the most common reasons that a short sale is declined is that the bank determines the homeowner does not have a true financial hardship. This determination may be the result of an incomplete financial affidavit submitted by the homeowner or may stem from the fact that the homeowner has liquid assets or a surplus at the end of each month.
Another reason a short sale may be declined is that the homeowner does not provide all the paperwork required to review his or her short sale request. Oftentimes, a bank may request the same documentation multiple times before the short sale review process ever begins as well as during the review process.
A short sale may also be declined if the parties are unable to agree on terms. The bank may determine that the property is worth more than the buyer offered and counter the original offer made by the buyer. If the buyer refuses to accept the counteroffer, then the deal cannot proceed. Additionally, the bank may impose conditions on the homeowner, such as signing a promissory note or making a financial contribution to the deal, that he or she will not agree to.Another common reason short sales are declined is the existence of junior liens. Many homeowners fail to disclose the existence of a second mortgage, home equity line of credit, judgment lien,homeowner's association lien, or tax lien when they first list their property. Although these types of liens will be discovered by the closing attorney's title search, if title is not run until a few days before closing, it may be too late to negotiate a settlement and obtain short sale approval from the junior lien holder. Additionally, some junior lien holders, especially judgment creditors and second mortgage holders, may demand payment in full before they will agree to release their lien on the real estate.
A short sale may also be denied because of an inexperienced, disorganized, or uncommunicative listing agent. If the listing agent does not provide the bank with all of the documentation submitted to him or her by the homeowner or fails to respond to requests from the bank or to communicate those requests to the homeowner, the result could be a denial of the homeowner's short sale request.
No matter what your situation is and no matter what you do, there is no guarantee that your short sale request will be approved. However, there are few things that you can do to improve the chances that it will be approved. In my next post, I will reveal a few tips for increasing the likelihood that your short sale will be approved.
If you are considering a short sale and have questions, please give me a call at 678-446-5925.
Comments
Post a Comment