What's the Big Deal? It's a Short Sale! The Bank Will Pay the Closing Cost Help to the Buyer. The Seller Has Nothing To Do With It.

What's the Big Deal?  It's a Short Sale!  The Bank Will Pay the Closing Cost Help to the Buyer.  The Seller Has Nothing To Do With It.

The few sentences that lead this post are what I am used to hearing when my Northern Virginina Short Sale Sellers counter offers to lower closing cost assistance to the Buyer.  Buyer's Agents don't get it.  Why do the Sellers care?  Their bank is the one paying the closing costs, not them.  It may be hard for Agents who look at Short Sale Banks as ATM machines for their Buyers.  Go in with a lowball offer.  Ask for as much as they want in closing cost help.  That doesn't fly with my clients.

You see, for every dime that gets paid out to close the Short Sale transaction, that's one less dime that's going to come off the balance of the mortgage owed by the Seller.  So while you may be out there saying, "No big deal.  It's the BANK that's paying, not the Sellers."  THINK AGAIN.

Cash contributions, often required of a Seller to close a Short Sale are often calculated based as a percentage of what is left unpaid.  Taxes may be owed on the forgiven loan balance.  So you can see, the bigger the outstanding loan balance, the bigger the consequences. 

So forgive my Sellers if they have countered that exceedingly high closing cost contribution your Buyers requested.  The bank may be shelling out the cash, but the Sellers deficiency on the unpaid mortgage balance grows as a result of it.