$3000 for Loan Mods/Audits Up Front......Contribute to the Short Sale NO WAY!!!!

So just a spin off from the great healthy debate "Are Attorney's Ruining Homeowners" I wanted to pose another topic and get opinions. The question that pops up everytime...."Will this cost me anything" or "I don't have to pay anything for this right?"

We all have been there, lender won't budge, buyer won't contribute anymore and now there's a gap between what you have and what's needed. The homeowner either legitimately CAN'T or WON'T contribute. However soooo many of the same homeowners willfully hand over $1500, $3000, or sometimes much more to an attorney for workout options.

With that being said can I, once again, reflect this back to us and ask is it our fault (To a degree) because WE havent properly discussed the difficult scenarios that may play out once we begin this short sale process and gotten everything out upfront at the listing appointment?

Do we just jump because it's a new listing rather than really screening, educating and preparing everyone for what may come?

Replies

Kimberley Kelly October 7, 2011 at 1:54am

Since the Seller can no longer contribute in my Short Sales, I REALLY have to lay things out for BOTH Sellers and Buyers here in California. Also..with the new law disallowing pursuit on 2nds, I have to try to be ahead of the Lenders in trying to figure out if the 2nd will even allow the Short Sale based on that law.

So far, it appears to be helping my Sellers, although I am told by other Short Sale Agents that they've had some turned down completely because they will not release their right to pursue deficiencies on the 2nd, which they can after a Foreclosure in many cases. Examining that 2nd is even more critical for me now.
Eric Mieles October 6, 2011 at 6:07am

Absolutely right guys. That time in the beginning is the most critical if you ask me. It's your chance to really set in motion the whole deal and might be the difference between a deal and a dud!!
Jeff Payne October 6, 2011 at 5:50am

Eric, I tell every seller up front that the lender can and will ask for a cash contribution. I put worst case scenarios in front of them to see how they react. In a listing appointment you MUST always look for a reason to stop the appointment and walk away. If they are truly BROKE, I tell them that we will just have to plead our case if they ask for a contribution and 99% of the time we come out a winner.

We MUST discuss all possibilities and be ready to walk away when the red flags begin to fly
Deidre St. Romain October 6, 2011 at 3:44am

I believe you are right Eric. A checklist when you talk to someone on the ins and outs of a short sale is helpful to me. There is so much ground to cover that we often do forget to prepare them for that fact. Nothing is more frustrating after they do spend money on an attorney conference. We move forward and then we get to the end of the transaction and it appears that they will have to contribute. If they have not been properly prepared the whole transaction could be for naught. It happens sometimes anyway but if we prepare them for the possibility are chances are greater that we can help that homeowner avoid foreclosure.

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