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Why do short sales fail?
Last year, I showed a large house which was offered as a short sale at the time. This property was in contract at least twice, but just came back on the market as a foreclosure. My clients were surprised and wanted to know what happened?
What happened, indeed? Why did the short sale end up as a foreclosure?
In California, 3 out of 5 short sales close escrow, or 60% of total. It could be a number and/or a combination of several things.
Property owner couldn't prove or didn't qualify for a real hardship. For short sale purposes, hardship could be one or a combination of several difficulties that include:
Loss of or reduction in income Death or illness Divorce or separation Job relocation or transfer Military service Increased expenses Drop in market value (this plays a part most especially if someone were relocating for a job)  More than one loan, more than one lender, and there's no cooperation.
Short sales are challenging enough as it is. When dealing with more than one lender, and having junior liens refuse to accept a payout offered by the primariy lien holder, then the file isn't moving anywhere.
Offer is much ... more

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