Challenges hit the real estate market on a daily basis and one that is starting to raise it's head is the non communication from Lenders to Realtors.
So why all of a sudden are lenders not communicating with Realtors? The reason is properties not getting closed once an approval has been granted.
The main cause of the 'non closing issue' unfortunately is the second lien or subordinate lien holder not taking what the first position is allowing.
Let me explain. A 1st lien is owed $700k and a second is owed $125k, the values of the house is now $400k. The first has approved a short sale but has only authorized the 2ND to receive $3,000. The 2ND is saying they require 10% which equates to $12,500.
So what we now have is a deficit of $9,500... so who pays that.
The homeowner can't pay it, the new buyer doesn't want to pay it so either the Realtor has to give up their commissions to pay off the 2ND or the deal is dead.
when this scenario comes up 8/10 deals are dead.
I will follow up later to show how there is a way round this challenge and how Realtors can not only get their commission but a further 5%