The Foreclosing Lender In a Short Sale Can Counteroffer Whatever They Want To

Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

There are two stages of acceptance in a short sale. First the seller accepts the buyer’s offer, then the short sale lender has to accept the offer. The lender may counter in many ways;

  1. There is a possibility that the lender will respond with a counter offer HIGHER than the price that the Buyer and Seller agreed upon. 
  2. Since the lender rarely advises on a list price prior to the listing, there is even a possibility that the lender will respond with a counter offer HIGHER THAN LIST PRICE.
  3. In fact, the lender often responds with a counter offer HIGHER THAN MARKET VALUE. Yes, this is not a typo, foreclosing lenders often want buyers to pay MORE than the house is worth. Why, you ask? It’s one of the paradoxes and anomalies that may never be figured out.

When the lender demands the buyers pay more than market value, there are two ways to respond:

  • The short sale Realtor can appeal the decision, or,
  • Give up immediately and let the bank damage themselves. Many studies have shown that banks lose on average 13% to 26% MORE in a foreclosure than in a short sale.

Your short sale Realtor should tirelessly appeal unreasonably high bank counteroffers. The bank ultimately will;

  • Either recognize reality and will let the house sell at a reasonable price, or,
  • Sadly the bank may refuse to mitigate their losses and insist on taking the house to foreclosure, where it could easily take them 6 months to 2 years to complete the foreclosure, put it on the market, get it sold and closed. During that period the lender is footing the bill for taxes, insurance, utilities and maintenance.


Posted by



Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East


(502) 664-7827



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  1. Michael Collins 10/05/2011 03:34 AM
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Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

add the costs to the lender for  servicing monthly costs .. another reason why servicers have been know to lose a fax or two. . .

May 04, 2011 11:54 PM #1
Goran Utvic
606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656 - Chicago, IL
We Buy & Sell Chicago Houses Fast

Dave - The banks are taking these loses and yet they still do not appreciate that the short sale actually is the most beneficial to all.

I think a lot of times the bank is working off of a BPO that somebody priced high, I see this all the time when I submit my BPOs and get questioned why previous reports were higher. Some of the mistakes are ridiculous I think it has a lot to do with people using automated software to complete POs.

May 05, 2011 12:50 AM #2
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Dave, I never stop shaking my head in amazement over the stupid decisions the banks make about some of these sales. Talking about a lose/lose.

May 05, 2011 02:37 AM #3
Michael Collins
*ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent* - Janesville, WI
CDPE, SFR , Wisconsin Short Sale Specialist Realto

I agre with Goran. Many BPO's are coming in too high. I am always catching mistakes that other agents are making when it comes to comparables.

Oct 05, 2011 03:24 AM #4
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