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Is it a good idea to ask the bank to pay closing costs on a short sale?

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August 24 2012 - US
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If you are FHA or VA, most of banks (actually investors who are approving short sales) are happy to give buyers up to 3% credits, but in this competitive market, if you ask for closing costs credit, the seller may not accept your offer. Never ask for credits if you are conventional loan buyers. Even seller may accept your offer, most of short sale banks (investors) won't allow. Short sale banks are mostly just servicers and need to follow their investors guidelines for approving short sales. If your agent is expert in short sale, she/he can find out if the loans are owned by Fannie Mae or Freddie Mac, or non-GSE and give you clear guideline on your offer. My suggestion: Make a very clean offer. Ask your agent to follow the listing agent's offer instructions. Many agents can't follow instructions and even it is the highest offer, it will be rejected by seller. Your agent needs to know how to make a clean and strong offer.

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August 24 2012
Put yourself in the bank's position:  accepting a short sale almost always means that it's losing money. Now, if you are the ONLY offer, which is highly unlikely, you might be tempted to ask, but this would only decrease the chance for the offer to be accepted.

Good luck.
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August 24 2012
Profile picture for wetdawgs
No, not a good idea if you have any interest in having the offer accepted.   The bank is already losing a heck of a lot of money, and request for closing costs is asking them to lose even more (i.e. is reducing your offer below another one that doesn't ask for closing costs).

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August 24 2012
The cleaner the offer the better the chances that the bank would agree to the short sale.
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August 24 2012
Profile picture for blub blub blub
No. The banks are looking for the cleanest and best offers. The seller can agree to anything, but the banks want deals that won't cost them more than they are already loosing. Asking for closing costs or repair credits will not put your offer in the best position.
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August 24 2012
 
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