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A Dozen Reasons to Avoid Short Sales 1) By definition, a short sale requires one or more existing mortgage lenders to agree to give up part of what the seller owes to them. Unless this costs them less than foreclosing, why should they? 2) If the seller can't demonstrate "true hardship" (according to lender standards), the lender won't agree to the short sale. 3) If the seller can't or won't supply the full package of tax returns, bank account statements and itemization of assets and liabilities, the short sale won't be considered by the lender. 4) At some point before or after the home is listed, the lender has filed a Notice of Default (NOD). This starts the clock ticking on the foreclosure process and leads to a Trustee's 5) The lenders are no different than you and I; they don't intend to take any loss that they don't have to, particularly selling a property for well under its fair market value -- if it's priced this way, consider it BAIT to get showings and offers, not a tactic that the lender agreed to (or typically, even knows about). 6) Short sales are widely misunderstood by many people, including real estate agents who are anxious for a payday. Assuming a home can be bought for the BAIT price, not to mention the even-lower offer that buyers often wish to make is usually nothing more than wasted time, energy and dreams. 7) Assuming all of the above terms are met and the offer is signed by the seller and submitted to the lender(s), the wait time for them to respond can easily run from 30 to 90 days or more, just to receive an answer, which could easily turn out to be a "No". 8) If the lender eventually approves a short sale, after weeks or months of waiting have gone by, it's not unusual for them to then require the seller to sign a note obligating themselves to substantial payments over time to repay the lender after the sale, perhaps as much as $10K to $30K. Often, this will result in the seller walking away and allowing the foreclosure to finish, with the property going back to the lender. 9) If all goes well for a buyer's offer and it is accepted, the lenders will often refuse to pay for repair costs, probably including termite-related damages, which can add greatly to the overall cost of the home. 10) By wasting a lot of time waiting to see a short sale possibly come together, buyers often lose out on other legitimate opportunities that come and go in the meantime. 11) After waiting on the sidelines for many months and possibly missing out on other opportunities, often one's hope is dashed by another buyer who unexplainably out-bids your offer. 12) Today's statistics show that only 15 to 25% of all short sales are approved by lenders. This means the failure probability is between 75 to 85%. Fortunately, there is a much better way to obtain a great deal in today's marketplace. Ask me and Ill be happy to explain it to you! By
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