Short Sales - Negotiating The Sale
Who will Negotiate the Sale ?
The listing agent and the home owner will negotiate the offers to get the BEST and HIGHEST possible offer.
Always present ALL offers to the seller and REJECT and or COUNTER Unresonable offers.
Have the Home owner to Accept the Best and Highest offer subject to the lenders approval of a Short Sale.
The lender don't want you to send in all offers for them to negotiate. You will only send then the BEST and HIGHEST offer for Short Sale approval. Keep in mind that this can take 45-90 days to get the approval. The lender has to weigh the value of a Short Sale ~VS~ Foreclosure. There are many steps to the process.
You will need a completed HUD-1 that must reflect the offer being submitted to the lender with the following information:
- Dates
- Fees
- Names
Remember these tips
- Do NOT add any fees that are not normally paid
- Seller may NOT recieve any proceeds from the Short Sale
These fees will generally NOT be paid on a Short Sale
- Home warranty
- Repairs - Short Sales are sold "AS-IS"
- Inspection Fees
- Fees normally paid to Buyers including Tax service fees
- Surveys
- Junk Fees
- Utilities
- Buyer Closing Cost over 3% of sales price
Fees they will concider paying
- Property Tax
- Owners Policy
- County Doc. / Transfer Tax (if applicable )
- Escrow Fees
- Commissions - May be reduced
- Junior Lien Holders - these must be negotiated and show amount offered for release of the Junior Lien Holder. ( Junior Lien Holder would be like the 2nd Mortgage )
Junior Lien Holders may accept $1,000 - $3,000 ( Example ) to release the property but not forgive the debt.
* You ask why they may do this.
- Better than getting nothing at all.
- Professional Courtsey
;)
;)
Roland a few points:
1. It is of my opinion that Highest and Best should not be used in a declining market. Actually, you want the Best offer, not necessarily the highest offer. You will then need to counter that offer in such a manner to benefit all parties involved. My blog on submitting the highest and best offer explains my stance.
2. "Do NOT add any fees that are not normally paid" - You should include all fees. Unless you are psychic, let the lender counter any fees.
3. 'Repairs - Short Sales are sold "AS-IS"' - If they don't pay for repairs (which is my experience as well), they do reduce the purchase price if you provide them with contractor bids.
4. "Buyer Closing Cost over 3% of sales price" - FHA will allow up to 6% for closing cost and you can ask the lender to pay up to 6% for those loans.