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Don't want to sound harsh but the age of borrowers getting off the hook without paying is becoming more and more rare. As my Dad, a life-long preacher, would have said, "it's time to have a Come to Jesus moment".
I think it is very important to set the stage well ahead of time. Explain from the beginning that there can be various players in a short sale and increasingly there will be costs asked of the borrower. And I would bring this up more than once during the process. That they can try and negotiate with your assistance on this amount but ultimately it will be their decision whether to take the deal or not.
In this case you are the messenger. You are not the bad guy. I like to use a kidding style to prepare my clients for bad news. I tell them that I may come to them wearing a catcher's mask if I have bad news. And while I don't do it for real, it does plant the seed that the news may not always be positive. So when I call them I say something like, "remember that catcher's mask..."
As for you taking a commission and feeling guilty... first of all, they are not paying it. The lender is. And that was factored in from the beginning. Second, if you have truly done your best, you should know it.
Of course, you could help defray their costs by giving them some of your share (if your state allows it).
But I really wouldn't recommend it as anything but a last resort.
My two cents worth.
Steele
Don't want to sound harsh but the age of borrowers getting off the hook without paying is becoming more and more rare. As my Dad, a life-long preacher, would have said, "it's time to have a Come to Jesus moment".
I think it is very important to set the stage well ahead of time. Explain from the beginning that there can be various players in a short sale and increasingly there will be costs asked of the borrower. And I would bring this up more than once during the process. That they can try and negotiate with your assistance on this amount but ultimately it will be their decision whether to take the deal or not.
In this case you are the messenger. You are not the bad guy. I like to use a kidding style to prepare my clients for bad news. I tell them that I may come to them wearing a catcher's mask if I have bad news. And while I don't do it for real, it does plant the seed that the news may not always be positive. So when I call them I say something like, "remember that catcher's mask..."
As for you taking a commission and feeling guilty... first of all, they are not paying it. The lender is. And that was factored in from the beginning. Second, if you have truly done your best, you should know it.
Of course, you could help defray their costs by giving them some of your share (if your state allows it).
But I really wouldn't recommend it as anything but a last resort.
My two cents worth.
Steele
After doing just a few of these I found that I didn't use the phrase, "you may be asked" and changed it to "you probably will be asked". Then if they weren't you look like a hero.
Steele
Melissa Polce said:
Oh yeah...it's been lowered but still steep, they originally asked for 15K seller participation or 30K prommissory...you just get ones where you know banks write down 300+ lost equity and then you get a tough one like this that no matter what-it is the Grim Reaper phone call...but I appreciate the feedback...we tell folks you may be asked for these things, you just wish it wasn't so much...
Tell the lender (who will in turn tell the MI company) that the seller cannot pay and to close the short sale file and foreclose. This will 50/50 scare the crap out of the lender because they know (as we all do) they will get shafted selling REO.
Guys/gals, listen... DO NOT be afraid to tell the lender to close the short sale file and foreclose on the house. Is it a bluff? Maybe, maybe not. I have done it on a 2nd lender who told me they wanted 12k. I said "no thank you, I will tell the homeowner this short sale is dead and to let it go to foreclosure" and I hung up. They called back 1 minute later and said 8k, I said "listen guys, the 1st will give you 3k and if you cannot agree to that, the short sale is dead and the house will get foreclosed on" and I hung up. They called back 2 minutes later and said how about 3k..
This is negotiating, not taking it up the back side from the lender and doing everything they say like good little Realtors.
GET BALLSY BOYS AND GIRLS!
In all reality, you should work your short sales through an experienced short sale investor, like me who can deal with these situations. I just paid a 5k cash contribution (on a 65k home) 2 days ago for a homeowner. Sure, I lost 5k of my profit, but, guess what? How do you think the homeowner felt?
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