In addition to my previous blog defining "Short Sale" as a "Market Value Sale", there is now a new term floating around with the CEO's of large financial institutions these days: "Lender Mediated Sale".
This is, perhaps, the most accurate term yet. Here's why:
In a Short Sale, or "Lender Mediated Sale", the lender holds the key to the transaction. All sales will be reviewed by a "Negotiator" working for the lender. The Negotiator's job is - you guessed it: To Negotiate the highest possible net for the lender. Because they lender is being asked to accept less than full payoff to release the deed, the lender may negotiate ANY item on the HUD-1 Settlement Statement in order to increase their net (until the full payoff amount is reached). This includes repairs, real estate commissions, seller concessions, and title fees.
Unfortunately for the real estate professional, these transactions will typically involve much more detailed work, more time to close, and less pay than an average sale. This is why 83% of realtors are avoiding this type of sale.
A sad statistic, considering that 1 in 15 homeowners is suffering some sort of financial hardship these days. In my opinion, rather than "shying away from short sales", as NAR puts it, real estate professionals need to learn how to work with lenders to complete these transactions, rather than leave the homeowner out to dry. We're hurting ourselves, hurting our clients, and hurting home values by allowing the number of vacant and foreclosed homes on the market to increase.
Learn to navigate short sales, work with lenders, know what to expect, and qualify Buyers to keep these deals together and get to Closing. After all, in a tough market, a lower commission is better than no commmission!
Comments(0)