When you see Wisconsin short sale advertised on real estate publications, it does not necessarily mean that the short sale was accepted by the lender. It just means that the seller and listing agent are hoping that someone buys the property and that the bank accepts the buyer’s offer for Wisconsin short sale.
Actually, the list price of the home Wisconsin short sales may not be the actual price that the bank accepts. It could be too high to the point that no one would offer to buy, or too low to the point that banks cannot accept. The list price is there mostly to attract buyers. The lender has the right to approve or disapprove the short sale on the basis of how much they earn from the sale.
There are many reasons why lenders would reject a Wisconsin short sale. The following are some of these reasons.
- Price of the short sale is too low. In negotiating for Wisconsin short sale, banks require appraisals and sometimes BPO. They also require a comparative market analysis so they could see if the price of the offer can be justified. If they find out that foreclosing the property is a better choice, they would reject the short sale. The seller or the agent can argue through comparable sales to prove that a short sale is more financially valuable to the bank than foreclosure.
- Incomplete package. If the documents are not complete, the lender may not approve the short sale. In many cases, some documents may even be misplaced by the bank itself. What the seller or agent should do is always keep a second copy and lists of documents that they submitted so that they can provide the missing documents anytime.
- Seller is not qualified. Disqualification of the seller may be due to unacceptable reasons presented in the hardship letter. Lenders may also find out that there are available assets that can be used for a repayment plan. It is important that the seller’s hardship letter includes plausible reasons such as job loss, death of family members, severe sickness, or accidents. There should also be a negative value on their profit and loss statement or monthly budget.
- Buyer’s disqualification. An evaluation of the buyer’s credit history, debt ratio, years on the job and other criteria will determine if the buyer is qualified for the short sale. The buyer has to submit a loan preapproval letter to gain its credibility to the seller’s bank. Otherwise, the bank might not take the offer of the buyer and rejects the short sale.
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