Who is involved in a short sale negotiation?

Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too. The addition of another party to appease makes the process a bit more laborious.

How does a short sale work in real estate?

Short sales involve asking the existing lender (s) to accept less on a sales price than the mortgage amount. They work primarily because the home is upside-down in value—meaning more is owed against the home than the home is worth on today’s market.

Can a bank accept an offer for a short sale?

More often than not, your initial offer will never be accepted. Most short sales come with a lot of back-and-forth negotiations. Therefore, you should focus more on why the bank should sell the home—not how much. If the negotiations go well, you will be guided in the right direction.

When to call a listing agent for a short sale?

Banks will call the listing agent when it’s convenient for the bank to call and when they have something to say, providing they haven’t already lost the file or laid off the previous negotiator. If your file is incomplete, it’s entirely possible your request for a short sale will fall to the bottom of the pile.

Who is responsible for second mortgage in short sale?

Second mortgage loans take the biggest hit in a short sale. In a short sale, the seller must request approval of the sale from the first mortgage lender, also known as the primary lien holder and the second mortgage lender, known as a junior lien holder.

How is a short sale negotiable for the buyer?

Through the short sale process, the homeowner’s lender permits him to sell the home for market value, which is often less than the principal balance on the homeowner’s mortgage. Depending on the lender, different aspects of a short sale are negotiable for the buyer and homeowner.

What does it mean when a home is short sale?

A short sale is the result of a homeowner being unable to pay mortgage payments yet hoping to avoid foreclosure. Through the short sale process, the homeowner’s lender permits him to sell the home for market value, which is often less than the principal balance on the homeowner’s mortgage.

Who is the primary decision maker in a short sale?

As the main decision-maker in a short sale, the primary lien holder sets the sale parameters, such as price, closing costs and the closing deadline. Although junior lien holder participation in a short sale is voluntary, declining to cooperate usually results in foreclosure and a total loss for the second lender.