The Anatomy of Short Sales. Part 5 of 7: Mortgage Reduction Negotiations
After all the information for the short sale is given to the servicer (short sale package with offer, Brokers price opinion, and all other information) this is when the file is reviewed by the investor. In this period, your negotiator utilizes his/her skills to acquire desirable terms on the approval letter.
The mortgage reduction negotiations period is important because your negotiator will negotiate on your behalf with the lender(s), servicers, and buyer’s agent (essentially the buyer) to obtain a deficiency waiver or a reduced promissory note. This is the most difficult part of a short sale and is a reason why most short sales fall through. As stated in my previous post, there are 5 main reasons why a short sale falls through:
- Impatient Buyers. Inability to maintain a buyer while negotiating with lenders for agreeable terms.
- Sellers lack of quick responses to meet lender’s demands. Banks have stringent rules on all documents being satisfactorily submitted. Organization is a must for your agent.
- 1st and 2nd (or 3rd) lienholder’s not agreeing to terms. All parties must be satisfied before the lenders issue approval letters.
- Inaccurate Brokers Price Opinions. If the lenders expect high compensation for the property, you will lose or will be unable to find buyers.
- Bad negotiators on banks side. Every expert short sale agent has dealt with incompetent servicers who work for the bank. They are underpaid employees that don’t have the motivation or the experience to properly execute a short sale file.
The negotiator must be the best of the best in dealing with these parties involved in a short sale. If you try to execute the short sale with a mediocre agent, it is likely you may not be able to walk away from your property without having unwanted baggage.
If you are located in Washington state and are looking for an agent and negotiator to work with, submit your information here and we will provide you with a free consultation with the best short sale agents in Washington.
Although it is possible to negotiate the deficiency post short sale, negotiating during the short sale would be optimal as you would have your home to use as leverage.
Next Post: 1/2/12 Monday