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Old 03-20-2010, 12:55 AM
 
458 posts, read 966,062 times
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Is the "seller" the bank when it's a short sale, or is it the person in hard straights selling their house?

If it's the bank, it doesn't seem wrong to ask the seller to pay closing costs, but if it's the person who is underwater on their home, it's probably pretty ridiculous to ask them to pay closing costs.

Thoughts? Just trying to understand the system.
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Old 03-20-2010, 01:14 AM
 
Location: Tempe, Arizona
4,511 posts, read 7,419,532 times
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It's the seller/owner and not the bank selling the home. The banks approval is a contingency of the purchase contract executed by the buyer and seller. A requested closing costs concession will be factored into the net amount the bank would receive. Net too low, and you will be denied or countered higher. Of course, this is assuming the bank would approve a short sale in the first place.
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Old 03-20-2010, 01:50 AM
 
Location: Dallas/Fort Worth, Texas
3,968 posts, read 9,337,143 times
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I have closed some short sales where the sellers were paying some closing costs. It's all a bottom line game for the banks. You can ask, and have nothing to lose, all they can say is no.

Naima
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Old 03-20-2010, 12:40 PM
Status: "Now working for a true portfolio lender" (set 18 days ago)
 
Location: MID ATLANTIC
3,977 posts, read 8,596,798 times
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What isn't transparent to buyers of short sales is the bank is going back to the sellers saying, "we will approve this if________________." Not necessarily in all cases, but many. I had one that required the seller to pay the second trust lender $1900 to play ball on the short sale. Another (B of A) presented the seller with a SURPRISE! note for 25K over 20 years (at 0%) at the closing table with the HUD I approval. Well, back up here......the seller had agreed to it, but between agreeing to it and closing, changed his mind and refused to sign. My point here, there is so much the buyer doesn't see or have knowledge of what is happening behind the scenes. They only know it's taking forever!

Sorry, I got away from my point........you can ask the seller and they may agree. But who pays won't be known until the bank and the seller negotiate. This is where the Realtor would want to show other offers (lower) and show why this buyer's contract was the best net. The best net offer can show all closing costs paid by seller.
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Old 07-28-2010, 02:51 PM
 
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We are buying a house that is a Short Sale. Can we negotiate the closing date? Our contact states that we will close 1-2 weeks from Short sale bank approval. School and jobs may not allow us to be able to close 1-2 weeks after they approve.

Last edited by Chaquinn; 07-28-2010 at 02:54 PM.. Reason: Clairfy
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Old 07-28-2010, 03:00 PM
 
Location: Colorado Springs, CO
1,571 posts, read 3,486,315 times
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The seller is the owner of the house. The bank is their lender who is willing to accept less than what is owed to allow the seller to complete the sale of the house.

Can you ask the seller to pay closing costs - sure, you can ask. If they agree and have the cash to do so - good for you. However, do understand the reason for a short sale is the seller is out of money.
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Old 07-28-2010, 03:16 PM
 
Location: Tempe, Arizona
4,511 posts, read 7,419,532 times
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Quote:
Originally Posted by Chaquinn View Post
We are buying a house that is a Short Sale. Can we negotiate the closing date? Our contact states that we will close 1-2 weeks from Short sale bank approval. School and jobs may not allow us to be able to close 1-2 weeks after they approve.
You can try to negotiate a closing date, but the seller's bank may end up dictating the actual date regardless what the contact says. If you already have a contract, it's a bit late to negotiate, but you can ask if the seller is willing to agree to a change. It may also further delay short sale approval if the bank is already reviewing the current contract and closing date.
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Old 07-28-2010, 03:18 PM
 
Location: Louisville, Kentucky
1,447 posts, read 3,045,742 times
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As a general rule, there is a reason these are short sales -- the seller is flat broke and on the verge of losing his house. The lender getting less money may wonder why the seller can toss in some closing cost money if he's told them he's broke and needs a short sale.

Yes, it happens, but don't expect it or don't expect much. If anything, you could be adding a wrinkle to a deal that is already wrinkled enough.
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Old 07-28-2010, 09:29 PM
 
Location: South Metro Denver for 25 years
8,637 posts, read 19,153,218 times
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Whether the lender will allow seller concessions to be paid depend on the type of loan the seller has.

FHA will allow 3% if buyer is getting an FHA loan. Fannie and Freddie usually allow 2% - but I have seen some servicers allow $0.

Sometimes the lender will allow the purchase price to be raised to cover the concessions once the approval has been given. The sellers agent needs to beg the servicer's negotiator.

Most approval letter give 30 days to close. Most lenders need 5 weeks to get through underwriting.
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Old 07-29-2010, 09:52 AM
 
3,339 posts, read 7,422,646 times
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Quote:
Originally Posted by Off Topic View Post
As a general rule, there is a reason these are short sales -- the seller is flat broke and on the verge of losing his house. The lender getting less money may wonder why the seller can toss in some closing cost money if he's told them he's broke and needs a short sale.

Yes, it happens, but don't expect it or don't expect much. If anything, you could be adding a wrinkle to a deal that is already wrinkled enough.
All logical sellers are willing to pay closing costs. It will just cost you that much more in the purchase price.
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