Chicago IL – 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.
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Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. firstname.lastname@example.org.
View My homes for sale at www.BetterLivingRealty.com.
Phil Buoscio, is a broker with Better Living Realty he leads the sales team “Phil Buoscio Team” and specializes in short sales in Chicago Illinois. Chicago Loan Modification Help can be referred to you. We don’t do loan modifications ourselves but we work with those who do. We know Chicago Short Sales. I am a Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor. We do business in Pilsen. McKinley Park. Bridgeport. Wicker Park. West Town. Ukranian Village. Lincoln Park. Near North. River North. East Village. Logan Square. Uptown. Edison Park. Portage Park. Hermosa. Lincoln Park, South Loop, West Loop. Bronzeville. Hyde Park. Kenwood. Oak Park. Brookfield. Cicero. Berwyn. Evanston. LaGrange. LaGrange Park. Riverside. We sell condos, single family homes, lots, land, multi units, two flats, three flats, etc.
Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Buoscio’s personal views and do not reflect the views of Better Living Realty – Buoscio Brokerage, Inc.. This information on why did this short sale fail is provided as a courtesy to our viewers to help them make informed decisions.