7 things that can make a short sale highly unlikely

Short sales require patience, dedication, tenacity, some skill, and some luck to successfully complete. All these factors add up to partially explain that, according to National Association of Realtors (NAR), only 1 out of every 10 short sale listings successfully close. Another main reason, that I believe short sales have become a dirty word, is that inexperienced agents are taking short sale listings that do not have a high probability of closing, and then treat it like a traditional listing.

There are some things that will make a successful short sale highly unlikely, and darn near impossible to successfully complete. Unless you have experience, and/or a great relationship with the asset manager, if the potential listing fall into one or more of these categories I'd highly recommend you walk away from the transaction. Save yourself and the seller the headache, time and effort.

1. The seller has not experienced any type of hardship that resulted to the delinquency of the loan a.
   
   Too often people think, why would I keep making payments at 500K when the house down the street just sold for 350K. It would be a nice idea if you could trade, but sadly that is not the case, and a short sale is not a financially responsible options.
   
2. If a seller is in a Chapter 7 or Chapter 13 Bankruptcy Plan.
   
3. If a seller has completed a recent refinance with cash out and soon after decides they want to sell.
   
   1. Many times a recently inflated appraisal for refinance can haunt a seller when trying to do a short sale. H.E.L.O.C.’s have the same effect.
      
4. When there is not enough value in a property to pay off the senior lenders and still give at least 10% to the most junior lender after all real estate costs/selling costs are paid. (There are some exceptions to this, but we'll leave this as the general rule).
   
5. The seller is unable to or unwilling to provide all information required for a complete Short sale package.
6. If their is a Cloud on Title
   1. Outstanding liens or judgments
      
7. When there is not enough time to complete a short sale.
   If the seller is less than 60 days from the trustee sale, it is very difficult to accomplish a short sale.
   
   1. This may be a leading cause for short sale failure, as many homeowners seem to be in a state of denial even after receiving a Notice of Default (NOD). Too many times I don’t receive a phone call until they’ve received their Notice of Trustee Sale (NOT), and by then it is very unlikely that we can pull it off. However we have had a few instances where we did accomplish a successful short sale within this time frame, but please don't bank on it. That was very a very unique situation. Even if we can’t help them there are always credit building techniques we can provide.

If you are having trouble making payments on your mortgage there are some pre-foreclosure options available to you. After receiving a NOD your options become limited. Don't wait until your only option is credit repair after a foreclosure. Click here to request your free no-hassle consultation of your pre-foreclosure options.

PS- If you are thinking of listing your home and you think it may be a short sale, please hire an agent that is confident and has experience with short sales. Team Chacon is currently putting together successful short sales.

 Seth Miller | West Covina Real Estate Consultant

Associate Broker Real Estate Hound

www.MyRealEstatePro.net

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