Negotiating a Short Sale

Short sale homeThe main thing to know when negotiating a short sale is that it’s always going to be priced somewhat below market if for no other reason than the fact the seller is looking for a quick sale.

I recently had a home listed for $280,000 when all comparable homes in the neighborhood were priced at $300-$320,000. Now granted, this house needed a new roof, but that plus some fresh paint wouldn’t even come close to approaching the $20-$40,000 margin house painterbuilt into my price. So for all intents, the house was very well priced.

But then along comes a buyer who, as part of his strategy for negotiating a short sale, says that in addition to a new roof, he would want to rip out the entire kitchen and remodel, as well as replace vanities in both baths… plus a more upscale front door, double pane’d windows, double crown molding throughout, and all new landscaping.

Now here’s what the buyer didn’t seem to understand. I will be negotiating this short sale on behalf of my seller, with a third party negotiator who represents the lender – who, by the time this sale is done, will be taking a $40-$50,000 loss on this loan! The lender’s negotiator is trying to mitigate the lender’s losses, not give away houses. So part of my job in representing the seller is to justify to the negotiator why the list price of $280 is a reasonable and fair sale price.

But you can be sure that nowhere in my discussion with the bank’s negotiator, does he want to hear that the buyer wants to only pay $260,000 so he can completely remodel the house. Do you really think the lender will give a flip about the buyer’s upscale tastes? …and contractordouble crown molding?

So in closing, here is the point I am trying to make. Negotiating a short sale is based on the current condition of a house less 10% to encourage a quick sale. The buyer is just kidding himself if he thinks a laundry list of upgrades will get the lender to accept a lower price. In short, the lender doesn’t care. If a buyer likes the house and the neighborhood, he’ll buy it knowing he is getting a bargain based on current market prices.

Note: If you are a homeowner who needs to sell, but is upside down on your mortgage, call me. I have the necessary experience to negotiate with the lender, and can help you with this type of transaction.

About Joyce Albert

Why you need a Real Estate Consultant, not just another Agent… The difference between a real estate agent and a real estate consultant is the difference between someone who just wants to make a sale, and a professional who is willing to share with you their in-depth knowledge of the market in order to help you navigate one of the largest financial decisions of your lifetime. In my career as a real estate consultant, putting my clients first is the hallmark of my success. So if you are looking for a true professional to help you buy or sell a home in the Greater New Orleans Area, please contact me. I look forward to woing with you. Certified 203k Specialist I am a certified FHA-203k Specialist - a program designed to assist buyers wanting to purchase distressed properties (hurricane damaged, repos, short sales) that require repairs or major rehab. Accredidations -  Accredited Buyer Representative (ABR)  e-Certified  Short-Sale & Foreclosure Certified (SFR) Other Memberhips. . .  Louisiana Association of Realtors  New Orleans Metropolitan Assn of Realtors (NOMAR)  Gulf South Real Estate Information Network  National Assn of Realtors (NAR) of Realtors (NAR)  Real Estate Board of Accredited Buyer Consultants (REBAC)
This entry was posted in Real Estate Information, Short Sales & Foreclosures and tagged , , , , , , , , , , , . Bookmark the permalink.

1 Response to Negotiating a Short Sale

  1. Anonymous says:

    I wanna say thanks for posting this awesome information. Keep up the good work. I’ll subscribe to your blog also. thnx!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s