What are some reasons why the bank would not approve a short sale?
The most common reasons that a short sale gets rejected are: • The sale price doesn’t meet the “net to lender” minimum threshold percentage of the market value. Most lenders are now using a minimum threshold analysis that ignores the amount of debt and focuses on the market value of the property. If the net amount that the lender would receive is less than a minimum threshold percentage of the market value, the short sale will be rejected. • There isn’t a hardship. In short sales cases, the hardship letter and financial documents must prove to the lender that there actually is a hardship. • Incomplete short sale package. If an incomplete short sale package is submitted to the lender, they may just ignore it and move on to a short sale case that has all of the required documents. They typically won’t bother contacting you to inform you that some documents are missing. • Not submitting a proposal. Organizing the request to approve a short sale can make the difference between success and
