This series is related to Loss Mitigation companies and how they impact Sellers and Buyers in a short sale transaction. You can read Part I here and Part II here.
Now that you've had a moment to get caught up with the first two segments, it's worthwhile to think about the impact Loss Mitigation companies have on a Buyer and their offer on a short sale property.
While some Sellers and their real estate agents believe that having a Loss Mitigation company involved in the transaction is a benefit, if you are a Buyer or a Buyer's Agent, I would caution you to consider the following before believing the same:
There is a potential cost to the Buyer. Loss Mitigation companies do not work for free. With that being said, someone has to pay the "fee" charged by the Loss Mitigation company.
Most companies I have researched charge a percentage of the sales price, ranging from .5% to more than 2%. Typically, Loss Mitigation companies ask the Seller's lender to pay their fees...which means that those same lenders will net less by having a Loss Mitigation company involved. As a result, the offer the Buyer submits may not be accepted by the bank...or at a minimum, may be counter-offered by a higher price to offset the fees charged by the Loss Mitigation company.
Negotiations are being handled by a vested third party. Loss Mitigation companies generally take over the negotiation with the Seller's lender(s) regarding the Buyer's offer. While in itself this is not a problem, it could result in one if the Loss Mitigation company suggests that the Buyer or the Seller will agree to anything other than what is agreed to in writing on the sales contract.
There is no guarantee....that the Buyer's contract will be approved...or, that it will be approved faster (and at a lower price) than if the Loss Mitigation company wasn't involved. While I'm not suggesting that there is ever a guarantee, I do believe that Buyers and their Real Estate agents need to know what impact a Loss Mitigation company may have on their offer.
Regardless of whether you are a Buyer, a Buyer's Agent, a Seller or a Listing Agent, it is important for you to know what impact a Loss Mitigation company can have on a short-sale negotiations.
For additional information on selling or buying short-sale property in Seminole or Orange County, Florida, call or text me at (321) 377-0157 or email me at LaShawn@LaShawnNorden.com
LaShawn Norden, PA, REALTOR, RE/MAX Central Realty, (321) 377-0157, LaShawn@LaShawnNorden.com
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