subject: Reasons For Rejecting Minnesota Short Sale [print this page] Just because a Minnesota short sale is advertised does not mean that it has been accepted by the bank. It simply means that the seller and listing agent have advertised it in the hope that someone buys it and the bank accepts the buyers offer.
In reality, the list price of the home Minnesota short sale may not be the actual price that the bank accepts. It could be very high that no one would ever offer to buy or it could be very low that banks cannot accept. The list price is there to mostly to attract offers but it does not necessarily follow that the bank approves that short sale. Remember that the bank has all the right to approve or disapprove the short sale because they get to receive an amount that is less than the mortgage due of the seller.
So what are the factors that cause the bank to reject Minnesota short sale?
One is that the price of the short sale is too low. In negotiating for 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 more financially sound, they would reject the Minnesota short sale. The seller or Minnesota short sale agent can argue through comparable sales to prove that a short sale is more valuable to the bank than foreclosure.
Another reason for rejection is an incomplete package for Minnesota short sale. If the documents are not complete, the short sale may not be approved. In some 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 lacking documents required.
If seller does not qualify for Minnesota short sale, the bank would definitely reject the short sale. Disqualification may be due to invalid reason reflected in the hardship letter and availability of assets that can be used for a repayment plan. It is important that the sellers hardship letter will show valid reasons like job loss, death of family, severe sickness or accidents. There should also be a negative value on their profit and loss statement or monthly budget.
Finally, the buyers disqualification can be a reason for rejecting the Minnesota short sale. An evaluation of the buyers 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 sellers bank.
