The other day I had a seller refuse to contribute to the loss on her short sale. Her home was $100,000 upside down, and she had been trying to short sale for two years. She told me she absolutely did not want a foreclosure on her record.
During negotiations with Bank of America, the mortgage insurance (MI) company requested the seller pay $3000 to offset some of the $100,000 loss. When they pulled the seller's credit report, they saw she had taken out another loan after she initially defaulted on her mortgage. This is what triggered the request for cash contribution . This is not an uncommon request.
At first, the seller agreed to pay the $3000 to get her short sale approved. All was well.
Or so I thought. A day later, she changed her mind. You see, she had read up on the internet and knew better - she would not pay a dime and they should cover the whole loss.
I told her the short sale would be denied if she did not contribute the $3000. This was about the third round of negotiations. The investor and MI company had done their analysis, and without the contribution, they would simply foreclose. This was not a bluff.
The choice was clear. Invest $3000 for a short sale or invest nothing and get a foreclosure.
If you're curious what a Bank of America denial letter looks like, here you go....
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com
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Did you ask the buyer for contribution of $3k?
Keller Williams Ann Arbor Market Center