WA – We recently talked to another agent about her short sale listing. (Some of the details have been changed to hide their identity) She had been working on this short sale for 6-8 months with no success. The original buyer offered 265k for the house.
The short sale lenders rejected the offer. The house ended up selling eight months later for 220k. Why did the short sale lenders reject the 265k offer, only to later on accept an offer for 45k less?
Because the person negotiating with the short sale lenders didn’t know what they were doing. Here’s what happened.
The first mortgage was owed $289,000. The 2nd was Bank of America, owed 60k. She submitted the 265k short sale offer to both mortgages holders. The first mortgage gives her an approval in a month. Bank of America never gave her an answer.
Here is the problem. Bank of America has no incentive to put time into this short sale file. Why? Because they are only getting $1,000. In a short sale, most 2nds will get a minimum of $3,000, and often 10% of whatever they are owed.
The first mortgage was greedy and wouldn’t offer enough money to Bank of America. As a result, they lost $40,000. Was that a smart business decision?
No. That’s a big loss for the short sale lender. To be honest, I would be embarrassed if I was that banker.
Here is what this agent should have done. She should have convinced the first mortgage to give Bank of America $3,000 to $7,000. Bank of America would have accepted the offer with more money.
Instead, the agent had to negotiate the short sale all over again. Not only that, but her sellers risk a bigger deficiency note. This first mortgage was one of the few mortgage companies not willing to release the deficiency.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at firstname.lastname@example.org. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 1-800-LISTING.
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Thanks for reading this,
Jonathan is a Managing Real Estate Broker at Phillips Realty LLC.
Jonathan Phillips specializes in loan modification assistance and short sales in Pierce County Washington. Pierce County Loan Modification Help, Pierce County Short Sales, Pierce County Short Sale Realtor. Short Sale Realtor. WA Short Sales. Realtor.
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