The bank can be relentless, so you better be prepared to fight with the same set of tools. Be polite, but firm and don't back down. Sometimes, but not very often, the bank will also want to negotiate the real estate commission, and there are cases in which the bank decides, when closing, to renege on its promise to pay a commission. This protects the seller from unconditionally agreeing to sell the home, only for the lender to disapprove the short sale.
A CMA will evaluate similar homes in the same area as the short sale advertisement and the price at which they were sold. The amount of the commission in such a case is the amount negotiated in the contribution agreement, which should not exceed 6 percent. Yes, you'll be part of a negotiation that will involve convincing the lender who has the mortgage to sell the property for a price lower than the mortgage balance, but that's just one step in the process. In a short sale, the proceeds from the transaction are less than the amount the seller needs to pay the mortgage debt and selling costs.
In addition, the managing entity may not require, as a condition of approving a short sale, a reduction in the real estate commission below the commission indicated in the SSA. Proactively or at the request of an eligible borrower, the managing entity will prepare and send an SSA to the borrower after determining that the borrower is interested in a short sale, that the property meets the requirements, and that the proposed sale is in the interest of the investor. In other words, the lender will continue its efforts to recover the property even though the homeowner has put the house up for sale or has signed a contract to negotiate a short sale. The servicing entity may not require the borrower to pay the valuation in advance, but it may add the cost to the outstanding debt in accordance with the borrower's mortgage documents and applicable law if the short sale or DIL is not completed.
The managing entity must pay all out-of-pocket expenses, including, but not limited to, notary fees, registration fees, release fees, title costs, property valuation rates, credit reporting fees, or other permitted and documented expenses, but the managing entity may add these costs to the outstanding debt in accordance with the borrower's mortgage documents and applicable laws if the Short sell or DIL is not completed. The managing entity cannot charge the borrower in advance any costs incurred in reviewing the title, but may add the cost to the outstanding debt in accordance with the borrower's mortgage documents and applicable law if the short sale or DIL is not completed. The following is a suggested workflow for agents interested in representing sellers who are or may be in a short sell situation. Be especially careful to explain in writing to all sellers that any statements about the seller's financial situation made in the initial loan application will be thoroughly discussed in the short sale application process.
