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Carl, Home Seller in Mansfield, OH

Shortsale...... Payback part of loss

Asked by Carl, Mansfield, OH Fri Nov 7, 2008

The bank has asked me to sign a promisary note in the amount of $12,000 to cover some of the cost from the loss. Is this the norm and should I do this. My house was for sale for 15 months 1 person wanted to buy approx loss after realtor fees and all other closing fees was $31,000. I owed $92,000 they netted $61,000 buy property was left intact and all utilities were paid and current.

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Hi Carl, some lenders will ask the borrower (you) to sign a promissory note as part of a short sale acceptance. The lender is losing more than the $31,000 (fees, interest, legal expenses etc.), and is just trying to offset their losses. You could check with their loss mitigation department if they would be willing to accept a lump sum of cash in lieu of you signing a promissory note.

Please note, cash contributions and/or the amount and terms of the promissory note are negotiable. If you fee that the amount they are asking you to pay will create another hardship for you, then substantiate your statement and suggest a different amount. The agent who has helped you negotiate the short sale may be able to assist with that as well. Hope this helps. Feel free to contact me for more details if necessary.

Susanne Novak
Solutions for Real Estate
Tel: 614-975-9650
Fax: 614-364-7478
ABR Accredited Buyer Representative
FIS Foreclosure Intervention Specialist
HUD Registered Bidding Agent
0 votes Thank Flag Link Fri Nov 7, 2008

No this is not normal... we do a lot of short sales and have been able to keep any of our sellers from having to do this. Now, does it happen, yes... Again negotiate it down as low as possible and work for a zero int. if you have to do it...

Remember, they loss mitigation person is usually working on comission... this could just be a "game" to see if they can get it from you... I would not risk the deal over it but might try to "call their bluff" Are you working with an agent? If you cant avoid it... then sign it, after all you do owe the money...
0 votes Thank Flag Link Sun Nov 9, 2008
I agree with Suzanne, negotiate it down and what's remaining, try and have the buyer increase their offer to cover that amount so you don't have to come up with any of it. All the payoffs I have been dealing with have been at ZERO percent interest so that should help as well.

Good luck!

Vicki Watzlawick
Broker Owner
CERTIFIED Foreclosure Expert
Exit Platinum Realty
0 votes Thank Flag Link Fri Nov 7, 2008
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