Short Sale Criteria

[satxproperty]

Hello,

Does anyone have general criteria about which short sales will get approved? The struggling family that is now living with grandma, driving a '83 Toyota? Or the investor that still has a home to live in with a cars, ski boats and flat screen tv's...

I have a buyer that wants to put in an offer on a house that is a short sale. This same seller has multiple (atleast 3) other houses for sale listed as short sales.

I've watched so many short sales fall into foreclosure, even ones that had reasonable offers. Seems to me that short sales are the bank's meager way to help those that are struggling, not to help the over-their-head-greedy that bought too many investment homes and want to dump them now.

I'd rather not waste my and my buyers time if this deal is destined for foreclosure.

[DMG]

This same seller has multiple (atleast 3) other houses for sale listed as short sales.

I would think that alone is a big help to getting it done as the bank will see this...

[Discover Davis Homes]

I think that the investor with 3 other homes is a bad short sale candidate. Bank is more likely to foreclose on this type of seller. Things change all the time and there are many variables but every seller submits a financial package to the mortgage holder. If the seller's financial situation hasn't really changed since the time they got the loan, if they have been making the payments but just don't want the house anymore, these are not good candidates for short sale.
Better chance with sellers who have lost their jobs, had the payment skyrocket due to adjustable rate, sellers getting divorced, death, etc. The sellers have to show a true hardship and while an investor who bought multiple properties may seem like a hardship I believe that most lenders are less likely to work with them.
Every situation is different. If your buyer really likes the house, submit an offer but have them keep looking for other options.

[satxproperty]

I think that the investor with 3 other homes is a bad short sale candidate. Bank is more likely to foreclose on this type of seller. Things change all the time and there are many variables but every seller submits a financial package to the mortgage holder. If the seller's financial situation hasn't really changed since the time they got the loan, if they have been making the payments but just don't want the house anymore, these are not good candidates for short sale.
Better chance with sellers who have lost their jobs, had the payment skyrocket due to adjustable rate, sellers getting divorced, death, etc. The sellers have to show a true hardship and while an investor who bought multiple properties may seem like a hardship I believe that most lenders are less likely to work with them.
Every situation is different. If your buyer really likes the house, submit an offer but have them keep looking for other options.

Thanks, that is kind of what I thought too... but I just happened to be observant about the properties and noticed this person had multiple short sales.

(How would a buyer/buyer's agent know one short seller is a better candidate than the other in advance. The sellers agent probably is sworn to confidentiality regarding their specific financial/personal circumstances.)

[Discover Davis Homes]

You can ask the listing agent basic questions. Why are the sellers going through a short sale? Ask basic questions about the short sale package, if they have no clue what is needed (financials, tax returns, etc.) then the listing agent probably doesn't have enough experience to get the short sale approved anyway.

[svrpaul]

You need to qualify the agent that has taken the short sale listing.

How much experience do they have doing short sales, etc..

We only take short sale listings if my partner thinks they are a very good candidate to qualify and only after they supply all of the documentation we need to start the hardship file.

Different lenders have different criteria... this is something that can only be learned from experience in the current situation since loss negotiators really don't have the time to train you how to do them right now.

As for the multiple homes syndrome... it's based on the current hardship criteria of the owner... not what they used to be able to afford.

I think we all know people that used to make a lot more then they do now....