It is often in the best interest of the bank to accept a short sale, especially when the property is on the verge, or possibly even in, foreclosure. The foreclosure process can be lengthy and cost the lender more money than the loss they may take on a short sale. However, banks are so overwhelmed in short sales right now, they are tightening the qualifications. The homeowner must prove to the bank that they are in a financial hardship situation, and are unable to continue to pay on the home. It must also be proven, usually by a Realtor or an appraiser, that the home is not worth the amount that is owed on it. There are two types of people who may come across a dilemma when the bank won't accept a short sale: buyers and sellers.

WHEN THE BANK WON'T ACCEPT A SHORT SALE: FROM THE BUYER'S PROSPECTIVE. So you have found the home you want. You decide to make an offer. You are in love. Your Realtor informs you that this home is "subject to a short sale approval". You make the offer, and the bank refuses to accept a short sale. What do you do?

1) Find out how much the home seller is short. If it is only a few thousand dollars, and the home is worth it to you, raise your purchase price. If the home won't appraise for that, you might be required to more of a down payment down.

2) Wait until the home is further into the foreclosure process. This is often a gamble, however, and many things can go wrong. Someone else can come in and purchase the home with more money, or the home can be further damaged if vacated by homeowners, as if often is the case. However, the bank does become more serious the closer the foreclosure process comes.

3) Perhaps, depending on the situation, the homeowner would be willing to proceed with a land contract or lease to purchase agreement.

PLEASE consult a Realtor and an Attorney when doing either of these. WHEN THE BANK WON'T ACCEPT A SHORT SALE: FROM THE SELLER'S PROSPECTIVE. You don't want to ruin your credit any further that it is by going through a foreclosure, so you decide to try and sell and go for a short sale. But, the bank says, no. What next?

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