Wednesday, May 05, 2010

Short Sales, Not As Popular as Bank Foreclosures.

Short Sales, Not As Popular as Bank Foreclosures.
Short sale make up a substantial part of the Orlando Real Estate Market, while there could be good deals, not all are easy to buy. Foreclosures sell 5x faster than short sales. Regular sale and bank owned properties attract more buyers because Short Sales come with more challenges and have low closure rate. Here are some reasons why short sale have a low closure rate.

1) Seller is not approved for short sale: This could happen if seller does not substantiate financial hardship to repay the loan(s)

2) Short Sale package disorganized: If an incomplete short sale package is submitted, it will not be acknowledged by lender or last to be processed

3) Seller is unresponsive: If seller is unmotivated to sign short sale paper work or promissory note, the transaction does not move forward. Sellers walk away with tarnished credit, and $0 from the sale.

4)Lenders Counter Offer: Lenders may want more than list price or will not pay for closing costs

5) Person handling short sale is unorganized: If person not organized, persistent, or experience, the process will not move forward

6) Buyers tired of waiting: If short sale taking longer than initially anticipated buyers will walk from the transaction

7) Property goes into foreclosure: It may go into foreclosure before short sale contract closes

8) Lien Holders Disagree: If there is multiple mortgages on property, one lien holder may agree to short sale and the other will not

9) Contract price is not sufficient: Contract price does not cover all final debt on property

10) Seller claims bankruptcy: This freezes seller property and cannot be sold.