We owe the bank more on our home than it is worth. We need to sell our home. We understand that this makes it a short sale. It has been suggested that we hire a Short Sale Negotiator to assist with our sale.
Should we do this, and if so, where do we find them and how much do they cost?
Sorry to hear of your misfortune. These are very hard times. Hang in there. Your real estate broker is the best one to ask this question of as some brokers prefer to work with a short sale negotiator, while some prefer to work on their own. Your broker should be able to help you find a good negotiator with references if you decide you need one.
Each lender has their own way of handling short sales. Some want faxes only. Some want emails only. Some want you to use their online software. Typically, when a broker lists a home they get on a conference call with you and the lender. You then give the lender permission to talk to your broker about the loan. The lender may ask for that permission to be in writing.
The lender will then advise you and your broker of how/where to submit an offer when it comes in on your home. The lender has an in-house department to negotiate what they will and will not accept in the offer. Once your broker submits the offer it is a long wait-and-see process.
The lender has to order their own appraisal to determine value so that they know their losses. They will have a bottom line that they will accept. They usually do not approve of you, the seller, paying for the buyer’s closing costs. Typically they set the commission in the transaction.
So then the question becomes, who will pay for your own short sale negotiator — whose job it then becomes to do most of the talking with the lender? You, your broker, the other broker, the buyer? The fees vary, it can be a percentage, an hourly rate or a flat fee.
This all needs to be determined upfront as real estate firms have to disclose what they will pay each other and the other firm has to agree to any reductions once the commission is posted on the Multiple Listing Service.
Once the lender’s negotiator accepts all points of the sale things start moving faster. The buyer has their inspection. The buyer’s lender orders their own appraisal. And escrow starts preparing for closing.
Sorry to not give you a definite yes or no. As you can see it is complicated. Talk with your broker. I wish you the best.
Jan Zufelt is an associate broker with John L. Scott Real Estate in Kingston.