Since 'short sales' are an increasing reality in the local Metro Portland market, I wanted to share some of the other realities.

We all know 'short sales' are anything but . . . short.  They take a lot longer to close, and the number one reason is lenders' response time.

That said . . . the other costs (since time is money) are topics agents need to discuss with their clients before considering whether it would be cost effective for buyers to consider the short sales in their local area.

In our local market, I'm seeing more and more addendas linked to the listing sheet.  And in those addendas are the costs that BUYERS are going to be required to pay to the sellers' appointed "SHORT SALE NEGOTIATORS." For the most part, they are written as:

 "Instructions For Submitting Offers on Our Short Sales"

And they include:

• "The Consultant Fee will need to be included on the Purchase Agreement, payable by the buyer.  On Page 2, Line 22, in the Earnest Money Agreement under Additional Provisions, include "Buyer to pay $3,999.00 to XXXXXXXX."

Keep in mind:  With a short sale the lenders aren't going to want to pay BUYERS' CLOSING COSTS and/or Prepaids, they will probably NOT want to negotiate repairs (property is typically sold "As Is / Where Is"), and now the "consultant fee" are trending!

On a SALES PRICE of $200,000  short sale . . . let's add that up:

• $3,999 - "Consult Fee"
• $5,000 - Closing costs (which may very and the amount used is ONLY an EXAMPLE)
• $6,500 - 3.5% FHA down payment (ONLY used an an EXAMPLE)
• $4,250 - 2.25% FHA MIP Fee

The Buyer would be responsible for $19,749

On a $200,000 "traditional" purchase, let's assume I can negotiate the $5,000 in a Seller concession for closing costs, and no there would be NO "consult fee."  A $200,000 'traditional" purchase might bring the totals the Buyer is responsible to: $10,750

NOTE:  This is an EXAMPLE.  But YOU GET THE IDEA!!

My buyer clients' budgets ARE something I am mindful of!

* I'm blogging from a coffee shop, and don't have my calculator.  I hope I can "do the math"