Are short sales guaranteed to work?
No. Even though short sales are increasing they are still fairly rare, as I have stated. All the criteria MUST be met for a bank to even consider a short sale. It is not easy to convince a bank that the market value of the home is lower than what they are owed. They do not like to take a loss on a loan. Then the bank must be convinced to discount the mortgage enough to make it viable for an investor to make a profit for his work and risk. The discount must cover all repair costs, closing costs, broker commissions, taxes and still allow for a profit for the investor. In many cases, we do all the paperwork and wait several weeks only to be denied. Again, in those cases, we eat all costs of the failed short sale and the homeowner continues to own and live in the house if he chooses. If the lender does not approve the short sale, Mohawk Capital has no rights at all to the property and no transaction occurs. The purchase agreement we have signed becomes void.
