Replies to This Discussion

Permalink Reply by Joan Psarros, CDPE, CRS, SFR on October 25, 2010 at 8:18am

Typically when there is a fee for the lawyer that negotiated the shortsale the bank will not pay that fee. This cost is typically a fee that helps to insure that you get the shortsale approved and a cost of getting a good deal. However, that fee should have been explained to you before you put in the offer. As far as the $3,000 to the second you could try and have your agent try and get them to pay that but if you are getting a good deal you may lose it. I have lost several to BOA as the BPO's came in higher and they wouldn't take the shortsale.

Permalink Reply by Michael Hayley on October 25, 2010 at 8:55am

I believe that in a negotiation you never get what you first asked for. Your offer should always be structured so that you can "settle" for something less than your first offer. Short sales are strange in that you are negotiating for price with the bank rather than the owner.

The lender's negotiator needs to "save face" and is seeking to get $4,500 better than your first offer. A negotiator always counter-offers the initial offer.

If you are wondering if the story you are getting about seller's bankruptcy is true, you can always Google it or search the clerk of courts for your county. It is public information.

I'd consider: Make a very modest counter offer with a stated negotiating position that you understand the seller is broke, and our offer is at what we think is market value, but to make the deal work we can offer to pay an additional $x. Expect another counter to that which will be closer to what you might be willing to accept.

This way the bank’s negotiator can show his/her peers how hard they negotiated for the bank. They save face and you presumably get a good deal on a home.

Permalink Reply by Jake Bowers on October 26, 2010 at 11:47am

Purely IMO, Nancy so take this for the $0 it cost you to get it: This $3k sounds like the seller's contribution that the (or one) bank is asking for them to sign on to the deal. It's not clear from the description, but let's assume that is the case.

If the seller is truly bankrupt, then what are the real odds of them coming up with the dough? And if they are hiding a few $$ and trying to cheat the situation, what are the odds of finding out all of the facts? Maybe you check as suggested above, but that process does not find all hidden seller $$; it only verifies the bankruptcy. Probably the best question in regards to the seller is: what do you think the seller's situation is, based upon what you know now, are you sympathetic, and how does that effect your thinking on whether the deal is good or bad?

The agents can go back and argue with the bank and try to prove that the seller really has nothing; it does not sound like they want to risk this, and are trying to push this to you to make the deal close. Maybe a bit self serving, but......agents have to deal with plenty of stubborn clients from time to time, and they have to make deals work or not feed their families and mortgages, so I would personally not get too overwrought about that, and just look at what is, or is not, a good deal for you and your husband.

One thing to keep in mind: This is likely not a small step for you, and it's emotional, despite all of a buyer's best intentions and efforts. In the world of distressed property, one needs to differentiate between what is normally thought to be fair and 'everyone's responsibility', versus what is a good deal and what makes the deal work. This is an abnormal situation and putting one's own value judgement in the equation and demanding that 'everyone pay for what they are responsible' is not alwasy realistic. (Besides the banks and their investors are losing money and the seller is probably in a terrible fix; I would give $3k any day to not be in their shoes!)

So, bottom line: If it were my situation, and I thought this was a good deal for me and my wife, my move would be to not worry about the $3k and whom it is going to and is it fair to me, etc., and decide if this is the house I want at my offer +$3k. It sounds like you feel it is a good deal. Once past the fariness aspect, you can negotiate the $3k as you see fit; pay it all with no risk of the deal falling through (well, at least for that reason), take some risk and depend on some hesitant agents to advocate, or put the deal at risk and play hardball.

And for some perspective: my wife and I are buyers in a short sale, and despite my biz background and plenty of biz negotiations in the past, I had trouble not having some emotions in our deal; it is stretching out in time from here to eternity, so I have had time to get a different perspective, which I am trying to share; you and your hubby are being pushed to a decision in a few days that you are clearly not 100% comfortable with. But, I have found that if we like a 'something' being negotiated, and it is a good deal overall , I always end up looking back and saying "Boy, I'm glad we put in that extra at the end to get the deal done and get this (fill-in-the-blank for the thing being bought)...."

Just my perspective; don't take it to the bank (if you don't mind the horrid pun).

Permalink Reply by Nancy M. on October 27, 2010 at 3:16am

Thanks for the input-our realtor agreed to handle the attorny fee's and we are left with the 3K cash contribution. We are debating if we should try and negotiate this amount.
Thanks again for the responses.

Permalink Reply by Jeff Payne on October 27, 2010 at 6:43am

The listing agent hired the atty to negotiate the deal so the listing agent should pay the atty, NOT the buyers agent. I would politely decline paying the negotiation fee and see where it takes you. I do not believe the atty can stop the sale because they did not get paid. If you knew about this from the start, then you should pay it but it should NOT be part of the negotiation after the fact.

Nancy M. said:

Thanks for the input-our realtor agreed to handle the attorny fee's and we are left with the 3K cash contribution. We are debating if we should try and negotiate this amount.
Thanks again for the responses.

Permalink Reply by Nancy Campbell on October 28, 2010 at 8:31am

You may want to try Tony Chard at 480-233-8660 or [email protected]. He worked for the B of A Short Sale department, now stared his own company to help real estate agents with B of A. He does charge a fee for his service, but can help you!!

Permalink Reply by Wendy Rulnick on October 28, 2010 at 8:55am

I have never heard "this type of scenarios, where the bank didn't even counter just accepted the buyer usually makes up the difference." The short sale is approved or not. If they are looking for $3000, that means they have not accepted the offer. This is being negotiated. Many investors will not allow the buyer to pay this, they might want SELLER participation in the loss. Also, if there is an attorney fee that you were expected to pay, it should have been disclosed up front.