Can you negotiate a lower price on a short sale?

Offer 10 to 15 percent below the approved price to start negotiations. If you lower an offer, the lender may not respond.

Can you negotiate a lower price on a short sale?

Offer 10 to 15 percent below the approved price to start negotiations. If you lower an offer, the lender may not respond. Wait for the lender to accept your terms or contradict your offer. Ask the seller's agent if there are other offers on the table or if a bidding war is being waged.

Expect a quick response from the lender if they offer the approved price. If the short sale of the home is approved, the lender has agreed to sell it for a pre-approved price, eliminating the need for extensive offers and counteroffers. Make an offer 10 percent lower than the approved price. Be prepared to submit evidence to support your offer.

Beware of short-sale homes on the market at low prices, as they may not be pre-approved, but instead generate losses to attract buyers and multiple offers. In that case, the sales contract is sent to the managing entity together with an alternative request for approval of the short sale. Because the CDIA Metro 2 format does not provide an allowable account status code value for a short sale, a short sale must be identified with the special comment code AUAU. The strategies for getting the lender to accept your short sale are different from buying a house that is listed on the fair market and depend on the seller approving the purchase price.

Neither buyers nor sellers can earn a commission in connection with short selling, even if they are licensed brokers or real estate agents. Study the market thoroughly and offer an amount based on the current short selling market, even if it's not in line with the approved price announced by the lender. So, even before you get too involved in a short sale, you should confirm that it's approved by the lender. Additional contingencies that will support a beneficial short sale contract for the buyer include the condition of the property, appraisal and financing.

In light of the growing number of foreclosures in the United States, the government has expanded the Affordable Housing Modification Program (HAMP) to include provisions and incentives for managing entities to allow short sales or deeds rather than as positive options for eligible homeowners in default who want to avoid foreclosure. Negotiating a short sale basically involves convincing the bank to sell the property in question for less than the mortgage balance. The contract must include the possibility that, if the short sale is not successfully negotiated within a certain period of time (usually 60 days), the buyer may cancel the contract at any time and for any reason, returning the entire advance payment to the buyer. The lender will need to understand that you have done everything possible to sell the property at the highest price.

It takes a certain type of person to enjoy negotiating counteroffers, let alone a counteroffer with a short-selling lender. Evaluate the expected recovery through foreclosure and disposition compared to a short sale or deed in lieu of a HAFA foreclosure (DIL). THIS SHORT SELLING WORKFLOW IS AN EDUCATIONAL TOOL INTENDED TO PROVIDE BROKERS AND SALES ASSOCIATES WITH A COMPLETE OVERVIEW OF THE SHORT SELLING PROCESS (LISTING, MARKETING, NEGOTIATION AND CLOSING OF PROPERTIES SUBJECT TO POTENTIAL SHORT SELLING). The minimum net amount can be expressed as a fixed amount in dollars, as a percentage of the current market value of the property, or as a percentage of the list price approved by the managing entity.

George Deschene
George Deschene

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