Will the Bank Reject Your Short Sale Offer

n order for a short sale to go through, the bank needs to agree to it and they need to accept your offer. There are no real certainties when it comes to short sales, and it can be very difficult to predict exactly what the banks will do. Just because you put in a good offer does not mean that the bank will accept it. They might even decide they do not want to do any type of this at all. Still, most of the time, the reasons that a bank will reject an offer falls into several different categories. Understanding these and addressing them helps to reduce the possibility that the bank could reject your offer.
The Price
Banks like to make money, naturally. This means that, if the offer you put into the bank is too low, then the bank is likely to reject it. Although you can get good deals on properties going through short sales, you and your agent need to be realistic about the price you offer for the property. Agents should do comparative market analysis and come up with a reasonable offer that the bank is more likely to accept.
Incomplete Paperwork
Sometimes, the buyer will feel that everything is going fine with the short sale only to realize later that the bank rejects the offer due to a problem with the paperwork. Banks can lose documentation. In fact, it happens more often than banks might like to admit. It’s a good idea to make copies of all documents, just so you have them in case the bank does lose them. Working with a professional agent versed in short sales can help to ensure a better chance of success in this regard.
Qualifications
The seller and the buyer both need to qualify for the sale. First, the seller needs to meet the bank’s short sale requirements. These can differ based on the lender, but they usually require that the seller is behind on payments and underwater on the mortgage.
The buyer also needs to qualify to buy a home. The lenders will go through the credit history and all of the normal checks when it comes to buying a home. If the buyer does not qualify for some reason, the offer will naturally receive a rejection from the bank. By submitting a prequalification letter, it can help to gain credibility with the seller’s bank, and improve the chance of the sale actually happening.
These are just some of the many reasons that the bank might eventually renege on the offer that you put forth. Banks can be very hard to predict, and going through a short sale without help is simply not a smart move. You really do need to have the help of an agent who has experience in the field of short sales. A good agent will let you know the process and make sure you are doing everything the right way to improve your chance of getting the short sale to go through.

Author Profile: Owner and Broker of Tri-State Realty, LLC, specializing in Property Listings, REO and Short Sale real estate in Maryland, Washington, D.C. and Virginia.

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