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Did you know that less than half of all listed short sales in CT actually close? Sad, isn’t it? Seeing as most short sellers are highly motivated to sell, it is rarely the sellers choice simply to “take the home off market”….so somehow more than half of all short sales fail to sell at all and simply expire, or fail to get approved and to closing.
Here at Reid Real Estate Group our personal short sale approval rate is near 100%….and our short sales close, so why is that the state average is so low? Here are the most likely reasons why:
- The home was overpriced and a buyer was never secured: Price and condition are the two reasons homes do not sell. A price correction addresses both. There is simply no good reason not to reduce the price of a short sale that is not attracting buyers.
- A buyer was secured but the short sale was mishandled in some way, never reaching approval stage: This is common also. Maybe paperwork was never completed properly, or maybe there was not enough follow up. Perhaps the short selling lenders valuation came in higher than market value and the parties involved did not know how to handle the situation. Maybe proper expectations were not set up front and the seller failed to qualify for the short sale. Maybe a pending foreclosure date was not addressed and the clock ran out. There are many ways to bungle a short sale, but almost all are ultimately preventable or remediable.
- Terms of a lender short sale approval letter were not acceptable to the seller: Sometimes short selling lenders ask for crazy things that the sellers can’t agree to. This also happens, but more often than not is also resolvable.
- Listing agent and/or attorney did not truly understand the short sale process: This is generally the #1 reason short sales fail and all the above reasons can usually be attributed to this. When the person in charge of getting the short sale approved doesn’t have enough knowledge or experience with the short sale process – things rarely end well for the seller. Short sales are complicated and require a professional with plenty of experience.
So things didn’t go as planned and your short sale expired…so now what? Well the good news is…most of the time you can simply try again. Sometimes it takes a try or two (or three!) but with right help, almost any short sale can be successful!