Realize that it is the bank you are asking to pay the closing costs, not the seller. In a short sale listing everything is paid by the lender even though they are not the seller. The bank will sometimes ask the sellers to contribute if they have any assets or accounts with money in them. The listing agent can make or break the deal. If the listing agent isn't experienced in short sale negotiations and follow up, forget it! The bank will almost always pay all the title fee's because they want to use their own title company. As far as your fee's...most of the time they will pay up to 3%. I have only had ONE where they wouldn't pay any of them. I would definately ask unless they have multiple offers. In a short sale the bank will only see one offer at a time anyway. It's the sellers and their agent that decide which one to submitt.
Justin Brennan - San Diego, CA
Many times it can get confusing if not explained correctly.
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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I have been looking at homes since April and have put in several offers. However, I've only put one offer in on a short sale and never heard anything back. So I've tended to stay away from even looking at them, as I know there is a lot involved and usually a very lengthy process. (One just came on the market, though, that I'd really like to look at so I thought I'd inquire and get your expert opinions and advice.)
Have a great day!
Let's be practical.....the owners are in a short sale situation because of a lack of personal funds....does it make good sense to ask them to dig deep into the resources they probably do not have for your benefit.....
If there is extra money floating around don't you think the bank is going to show an interest in it?
As always, there's no harm in asking but I wouldn't get your hopes up.
Best of luck to you.
DRE # 01326917
Ferdig Real Estate Solutions
1) What is the market value of the property (remember that the negotiator will commission a BPO - broker's price opinion - to determine what the property is worth.
2) What is the balance of the loan - know how much the lender needs to "forgive".
3) How much is your offer compared to market value and loan balance? If you submit a low ball offer, the negotiator will be less inclined to accept the offer and grant credits Are you writing your offer based on fair market value?
4) What other expenses are you asking the seller (in this case, the lender) to pay? Note that most lenders will cover the selling expenses, taxes, insurance, but not necessarily repairs or replacements. In many cases, they won't pay for Homeowner Association fees and fines.
5) Are you writing an offer in a competitive situation where there are surely going to be multiple offers? If so, by asking for closing costs, assuming that your offer price is on par with the others, you may weaken your offer with a request for closing cost credits which result in lower net proceeds for the seller
When you are asked for your best and highest offer, remember that highest offer doesn't always win. Sometimes, terms trump the higher offer. And in many cases, all CASH offer rules!
In all of the short sales I have negotiated and closed, only once has the short sale lender ever not allowed seller paid closing costs. One other time, a short sale lender reduced the allowed amount paid for closing costs. That's 2 of around 20 transactions, plus others that are not yet closed.
Good luck to you...
Hope that helps.