I came across a few good points to look out for to share today. To start, it was stated that about one third of short sales are not able to be closed for varrious reasons like:
- Seller has too many assets--In this case the lender will require an owner contribution which could be the deal breaker.
- Seller won't cooperate in the process--This is important because the seller will have to be patient through the process and will for sure have to sign a lot of paperwork.
- House is the lowest 10% of the neighborhood--This becomes a problem because the comparable will show the house is worth more than a buyer is will to pay since with the seller not wanting to do any repairs.
- Outstanding Liens--This could be HOA leins, mechanics leins, IRS leins, family loans in which leins were filed...all of which need to be satisfied to close the short sale.
This is why I allways want to ask several questions up front before beginning the short sale process to determing if there will be any issues. Sellers should know that if they have assets, they will be asked by the lender to contribute towards satisfying the junior or second lien holder, typically an amount of 10% or more.