If you are lucky you may be able to work with an attorney who negotiates your short sale. But, DO NOT WORK with an unlicensed, unregulated, uninsured person or entity. If you have a doubt, you should have your attorney qualify the third party negotiator before you start working with them.
Full Answer
The real estate agent or broker usually negotiates an amount in a short sale to satisfy both the first and second mortgage holder. In most cases, the second mortgage holder receives a lot less than the first mortgage holder. Depending on the agreement, language, etc. of the documents, whatever the 2nd mortgage holder receives is all they get.
The junior mortgage holder needs to consent to the balance of the net proceeds remaining after payoff of the first mortgage in exchange for a full reconveyance of their junior mortgage. Here, the agent contacts the second mortgage holder on accepting the listing.
Short sales are complex transactions involving coordination and cooperation among a number of parties including, but not limited to, servicers, appraisers, borrowers (sellers), buyers, real estate brokers and agents, title agencies, and often mortgage insurance companies and subordinate and other lien holders.
After 5 weeks back and forth between the attorney and Chase we were $13,000 short on the sale. The lender had issue with a 7% commission. We had to send a full short sale package to Chase despite the fact that it was a second. Funny thing is the guy at Chase said this is a first mortgage (It didn't say 2 nd on the top of the mortgage). Lol.
So, while the 2nd lien holder can certainly hold a short sale hostage and there are no laws you can use to force them to agree to a payout, there are still some alternatives to make the short sale go through to closing. Short sales are crafty games played by crafty players.Feb 13, 2013
A short sale is when a mortgage lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner. The lender forgives the remaining balance of the loan.Jan 26, 2022
A short sale negotiator is someone who provides assistance in negotiating with the lender on the seller's behalf. The goal is to convince the lender to accept less than the debt amount on the mortgage(s).
7 steps to easily negotiating the purchase of a short sale propertyCommunicate and Set Expectations.Gauge the Market.Advise About Lowball Offers.Know that Short Sales Are More Attractive When You Have a Cash Buyer.Once You Make the Offer, Be Patient.Remember That You're Negotiating With the Lender.Be Resolute.May 15, 2017
Can You Negotiate A Short Sale? It is entirely possible to negotiate a short sale, but doing so can be a time-consuming process. Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too.
Which of these lenders would be least likely to approve a short sale? Junior lenders are least likely to approve a short sale. Because they're in a secondary position when it comes to liens against the property, they realize that there may not be any money left to pay them after the lender in first position is paid.
If the list price is too low, the bank will reject the short sale. Moreover, a low list price could be a strategy used by the listing agent and seller to entice multiple offers on the short sale. In short, the list price of a short sale could mean nothing at all.
How to Make a Short Sale OfferOffer a Strong Earnest Money Deposit.Check the Comparable Sales.Don't Ask for Special Reports or Repairs.Give the Bank Some Time.Assure the Seller You'll Wait.Offer to Pay the Seller's Fees.Shorten Your Inspection Period.Provide a Strong Preapproval Letter.
The lender agrees to accept the sale proceeds and release the lien on the property. The proceeds of the sale pay off a portion of the amount owed. Short sales are one way for borrowers to avoid foreclosure.