Dealing with Short
Sale Rejection
by Jeanette Joy Fisher
Buying houses by means of a short sale can be a
great way to make significant amounts of money,
but they're not for everyone. You have to find a
seller who will work with you to persuade the
lender to sell the home rather than allowing the
foreclosure process to continue. Then you have to
submit an offer that's low enough to make a
profit, yet not so low as to be rejected
altogether.
If a lender does reject your offer, all isn't
lost. The first thing to do is to try to determine
why your offer was rejected. There are many
possible reasons, and if you want the sale to go
through, you must job find out exactly what the
lender wants in order to make the sale happen.
Here are possible reasons.
First, your offer may simply have been too low,
which meant the lender would be taking too big of
a hit by accepting it. They also may believe they
can do better once the foreclosure has been
completed, or since loans are often sold to
investors, it's also possible that the holder of
the note wouldn't accept the loss.
Perhaps the borrower's financial difficulty wasn't
stated strongly enough to make a persuasive case
for a short sale. If that's the case, the lender
might want to work out an alternative payment
schedule with the homeowners rather than entering
into a short sale.
Since most lenders will require a broker's price
opinion (BPO), make sure your offer is somewhere
near that figure. Otherwise, a lender will be
convinced that they can do better on the open
market once the foreclosure is complete.
There may be other reasons, but the number one
reason short sale offers are rejected is simply
because they're too low. After all, lenders are in
business to make a profit, and even when appears
there's no profit to be made in a particular home;
they want to cut their losses as much as possible.
So don't get greedy. You'll rarely be able to
steal a home, but you can often get a
substantially lower price than you would on the
open market.
One of the best ways to avoid coming in too low is
simply to ask the lender how much they hope to net
from a short sale. They may not tell you, but
you'll never know if you don't ask. Even if you
don't get an answer in the beginning, you'll have
another chance to ask before they make a
counteroffer. Be courteous, but emphasize that
you're really hoping to make the sale happen.
Again, you may be surprised by the figure you
receive, and if it's acceptable, jump on it. Don't
kill your sale by being too greedy.
If your short sale offer is rejected, don't give
up. Probe for more information about why your
offer didn't fly and then try to satisfy whatever
they ask for before making your counteroffer. You
won't be stealing the home, but there's often
plenty of profit to be made.
Learn how to
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Copyright © 2006 Jeanette J. Fisher
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