From my experience doing short sales in Los Angeles and Orange Counties, the following list are the ten most common deal killers for doing a short sale (in no particular order):
- The seller lies about their assets and the bank finds out.
- The seller disappears or becomes non-responsive toward the end of the short sale process. On occasion, seller’s become so depressed that they no longer want to participate in the process and their lives are a complete mess.
- The bank is absolutely UNRESPONSIVE. There are a couple of lenders that I refuse to even deal with because they will not respond to anything.
- The short sale gets approved and then the buyer can’t get their financing in time.
- By the end of the short sale, the property has depreciated and will not appraise.
- The bank offers the seller an unsecured note for a small amount of money compared to what is owed and the seller refuses to agree to the loan.
- The seller refuses to provide updated financials and bank statements before the closing.
- The buyer gets tired of waiting around for the bank to make a decision and finds another property.
- The bank’s BPO and/or appraisal are totally unrealistic and do not reflect current market value.
The property goes to foreclosure because the short sale can be finished. This is less common now because I have figured out how to postponed foreclosures to get the deal done, but it still does happen on occasion.
Sincerely,
Mark Shandrow
Keller Williams Realty
