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Will my short sale be approved on my San Diego home or rental? Hi, my name is Gary Kent.
I've been a Realtor in San Diego for 28 years. And you may be wondering whether your short
sale will be approved. I'm going to answer that question, but from a reverse angle, and
I'm going to address why short sales are denied. The number one—and I'm going to go over,
I think it's nine reasons why short sales are denied. Please don't count because it
may not be nine. Anyway, the number one reason that short sales are denied is because people
hire an agent that is not a short sale expert. They may hire a nice real estate agent, a
real estate agent they know, a real estate agent that works in the neighborhood, et cetera,
but not an agent that really understands short sales. So, that's really critical. If you
don't have an agent that knows short sales, you're going to have problems, and you may
well be denied. So that's the first one. The second most common reason is that the person
starts too late and the bank forecloses on the home. So it's maybe 3--4 weeks away from
foreclosure, or I've some people contact me a few days before foreclosure, and the bank
says, 'No, we're just going to proceed with the foreclosure.' So please don't wait too
long to do a foreclosure. Another very common reason—sorry, to do a short sale. Another
common reason is that the seller, the owner, is slow to provide documentation, et cetera.
Short sales will often times move, they usually move at a rather slow pace, but interestingly
enough, the banks while they're moving slowly, will suddenly say, 'We want this piece of
paper by tomorrow.' So it's very important that you're ready to provide documentation
quickly. And then another big reason, and you know, this probably is the number two
reason behind not having a good agent, and that is that the seller's not qualified for
a short sale. I'm not going to go over all the qualifications; if you want to talk to
me about whether you're qualified for a short sale you can call me. My number's 858-457-5368.
But that's a big reason. Then another common reason that short sales are denied is a high
appraisal. So, let's say you have a home that's worth $500,000. Because it's a short sale
and short sales tend to sell for a little bit less, perhaps you have a buyer for $485,000.
And the bank comes back and says, 'Well, we want the house to sell for $550,000.' I've
had this happen before. And then what your agent has to do is negotiate with the bank
and convince them that they're not realistic. And often times they can be convinced, sometimes
they can't be. So if the bank holds firm to an unobtainable price then your short sale
will not be approved. Then other times if someone has a second, or a second and a third,
or a second and a third and a fourth and a fifth—I've actually had that many liens
on a home—it becomes a lot more difficult to do. Having a second by itself is not that
hard, but once you get into more loans or liens, it becomes more difficult, and particularly
when those junior liens, as they're called, require more money than we're able to get
them. And then, you know, probably, I'd say there are two more reasons. One is the buyer
bails out at the last minute. You know, they change their mind; you say to them, 'Hey,
congratulations, the short sale's approved,' and then the person buying the home says,
'Well, you know what, I decided I don't want it.' That, realistically will happen sometimes.
And then the decision, or the last reason I'm going to say is the lender just makes
a bad decision. So, even though I've just given you all these reasons, and it makes
it sound, you know, that your short sale will never be approved, we have most of our short
sales approved. Statistics vary, but probably across the board about half of short sales
are approved. For us, my unofficial statistic would be about 85 percent of our short sales
are approved. So, that's kind of a synopsis of why short sales are denied. And a couple
of other things. If you are thinking about whether you want to do a short sale or not,
whether, you know your options are, 'Well, I'll just keep the house' or do a short sale,
I would suggest you go to my website which is www.ShortOrStaySanDiego.com. That's ShortOrStaySanDiego.com.
If you go to that site, plug in just a little bit of basic information, it will give you
three different scenarios with either low, medium or high appreciation rates, and how
long it'll take before your underwater home is above water. And then the last thing is,
if you want to discuss doing a short sale, if you have some questions, if you'd like
to have me handle your short sale, please call me. And you can call me at 858-457-KENT,
like the name. Remember, my name is Gary Kent. Again that's 858-457-5368. Thank you.