Solving the Knoxville Foreclosure Crisis
One Homeowner at a Time

Rick Smenner

RE/MAX Preferred Properties
[email protected]

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Knoxville Short Sale – What Do To When A Short Sale Gets Denied

urlKnoxville short sales are long, tedious transactions. After months of negotiating with a lender, there is nothing more disappointing than to find out that a short sale has been denied by a lender.  Still, even after a denial, there are still things that can be done to combat a short sale denial. Even though short sales are in a lender's best interest, lenders can be fickle about approving short sales. There are many reasons why lenders will deny short sales, but here are the three most  common reasons: the price, incomplete package, or the seller doesn't qualify for a short sale. Luckily, for each of these reasons, there are ways to prove your case to a lender, even after a short sale has been denied. An experience Knoxville short sale agent will know how to navigate the situation if you receive a short sale denial for any of these reasons. In this post, we'll show you how each of these denial reasons can be disputed with your lender. The Price The price of a short sale is one of the largest reasons a Knoxville short sale will be denied. Unfortunately, short sale lenders can have some serious difficulty understanding a fair price for  a Knoxville short sale. Short sale lenders rely on Broker Price Opinions to valuate properties, which don't always provide the most accurate price for a property. If a short sale is denied due to a price discrepancy, there are ways to dispute it with lender. You're realtor is able to request a reconsideration of value. Some banks have specific forms to dispute the price, while others don't. Your realtor can order a new BPO and also provide a Comparative Market Analysis to help show recently sold properties in your area. By showing recent data, your realtor can help show why the offer price is a fair value for the property. Incomplete Package An incomplete package is another reason why some short sales get denied. Either a seller is difficult to get paperwork from or an agent is disorganized and doesn't take the time to make sure all of the paperwork has been submitted. The unfortunate part is that most short sale lenders will not even consider a short sale until all of the documentation has been submitted. At some point, they will outright deny a short sale if they don't have the paperwork. The good thing is that this is relatively simple to fix. First, make sure you pick an agent who is organized, knows the short sale process, and has the time to dedicate to your short sale. It is also very important that as a seller you take care of getting all of the necessary paperwork signed and returned to your agent as quickly as possible. Seller Doesn't Qualify For A Short Sale Finally, another common reason why many Knoxville short sale fail is due to the fact the lender feels that the seller doesn't qualify. This means that they feel that a seller has not proven enough hardship to qualify for doing a short sale. In order to dispute this, you'll need to provide additional documentation to show that you qualify for a short sale. You'll need to show a decrease income and some sort of hardship that has made it difficult to pay your mortgage. You may also need to resubmit a hardship letter that outlines what made it so difficult for you to pay your mortgage. Bottom Line - A Denial Isn't The End If your short sale gets denied, it doesn't mean that's the end of the line. There are ways to try and dispute the denial. Short sales aren't always easy and there is no guarantee that you'll get approval. But, it is much better than the alternative. Are you curious about your options to avoid foreclosure on your Knoxville home? If so, please do not hesitate to contact me by phone at 865-696-9002 or via email at [email protected]. My team and I are dedicated to helping homeowners explore their options to avoid foreclosure.  Also, be sure to check out our Knoxville Short Sale and Foreclosure Solutions Page.

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