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Replies (18)
- wetdawgs
- Contributions:26841
When a bank has approved a short sale, they are trying to get back every possible penny, therefore, the probability of approval of closing costs is quite small.
The approval of closing costs as a cost to the seller is decreasing dramatically throughout the housing market. Part of the logic is that if the buyer cannot afford the closing costs, perhaps they shouldn't be purchasing the house.
- Laura Myers, "LauraMyersRealEstate"
- Contributions:51
The key to getting the closing costs is to know as a buyers agent what the BPO is and the banks (it varies) are looking to return a specific % of the BPO. If your purchase price plus your closing costs keep them in that range you can get the contribution. Again, different banks are more lenient on this approval. Another key is the lisitng agent you are working with. Do they know how to work the HUD that is submitted to the bank? Re-interview the listing agent with top questions like: What ratio of closings have you achieved with short sales? Know what bank it is. What is the BPO? Run your own comps and get the listing agent to submit with the current BPO. Look up a local short sale specialist in your area. Inquire with them on their techniques.
You can and will get closing costs included if you show the bank how it makes sense to their numbers. They don't spend much time analyzing anything else. Good luck
- 80smusicrox
- Contributions:420
Hmmm. I dunno. Buying a short sale is not buying a normal sale from real homeowners...really not much room for negotiation, let alone communication.
We paid all of our closing costs with our short sale purchase....not to mention all the inspections (even those which are typically seller-paid). Short sales are generally "as is". As a buyer, don't expect to get much interest in your wants or needs. The seller's bank(s) could care less what you want... they just want their bottomline.
- wetdawgs
- Contributions:26841
Inspections are not typically seller paid anywhere I've purchased. While sometimes sellers do inspections and include those inspections with the sales package, any buyer who would fully trust those is asking for big trouble!
- Nicole Tucker, "realtornicoletucker"
- Contributions:215
As a Short Sale Specialist I have learned that it is Lender specific. Some lenders will pay for closing costs on a sale and others simply refuse to and would rather lose the sale and go to foreclosure(it has happened to clients of mine twice this year alone). I am still trying to figure out why the Lender would rather lose a sale versus increasing the sale price(as most sale prices are less than typical resale sale price)and paying the closing costs or a portion of them and getting the sale thus avoiding the fees for foreclosure, attorney's, home maintenence and additional fees.
And yes, "they just want thier bottomline" and will not accept less.
I wish you well, hang in there. Short sales can take time. Your on thier schedule, not yours.
- Janice Smith, "smith1962"
- Contributions:47
The last 2 short sales that we did, the lender did not pay any of the closing costs, as we asked in the offer. Most lenders are not willing to negotiate any extras when it comes to short sales or foreclosures. The home is probably already well below market value, so I would suggest if you really want the home, make your offer without any closing cost request. You will probably get it. Good luck.
- Andrew Adams, "203K Specialist"
- Contributions:9349
As realtors...I don't understand how you can say that they are selling these below market value. Regardless of a short sale or an REO sale, what someone is willing to pay for it is the market value. The same mentality would try and exclude the short sale or reo property from a comp on an appraisal or CMA.
- Durenda FachtmannCEC CRS GRI, "Durenda"
- Contributions:512
hbgal77.
On short sales, Seller paid Buyer concessions will vary from lender to lender.
Some will pay reasonable closing costs, some will pay only a fraction, and others will not participate in buyer closing costs at all.
If you have countered and adjusted the net to the lender's agreed price, and they still refuse to pay your closing costs, if you want the property, you will need to come up with the amount to cover your own costs.
Best of luck
- CJ Brasiel Broker Assoc, "CJBrasiel"
- Contributions:186
Writing an offer on a short sale with a credit back for buyer's closing cost is not very commonly approved. Lenders order a BPO (Brokers Price Opinion) to get a good idea of what the property is currently worth and then the number crunchers come up with a bottom line sales price they will accept to approve the short sale.
Asking for a credit back post submitting the offer is even more difficult. If it is associated with repairs, it may be possible but highly unlikely. The other issues with writing an offer higher than value to provide for a credit back is that it normally will not be supported by an appraisal. Very rarely would a short sale credit back support an appraisal over list.
CJ
- hbgal77
- Contributions:21
Thanks for all the advice. The short sale is comp to the other houses in the neighborhood, maybe even a little more actually. It has a lot of upgrades. We countered back so we will wait and see.
- Kelly Clevenger, "kclev"
- Contributions:23
I have found that the negotiator the lender sssigns to the sale will tell me the net they need to clear and if the buyer needs to add closing costs into the purchase price that's fine as long as the lender is satisfied with their net.
- Dina32935
- Contributions:1
Sometimes if you offer full price plus the closing costs, ie: $100,000 (price home is listed for) plus the closing costs ($6,000) = $106,000 they will accept.
- russky77
- Contributions:2
Dina, why would you add to your full price offer an additional amount that reflects closing costs. You would still have to pay your own closing costs. All you're doing then is offering more than list. If you must do that, then you can add in any amount you want. Why not just offer $105k, or $110k if you feel they won't take the list price? Not sure I get why adding an amount equal to the closing costs you'll pay would help. You offer more, but still pay closing...how does that help?
- Kaya123
- Contributions:1
I think what Dina is saying is that if you make an offer equivalent to the list price plus approximate closing costs AND THEN ask the lender to pay the closing costs, they may be willing to do it. The lender gets the extra $$ to cover closing costs and the buyer is basically financing the closing expenses.
- Min & Jimmy OBurns, "oburns"
- Contributions:50
I'm dealing with Bank of America with a Fannie mae conv loan. I heard that the new guile lines prohibit closing cost being paid by the bank-is this true?
- Nicole Borsey, "Nicole Borsey"
- Contributions:240
you can totally get closing costs... they usually do not have a problem with 1% (sometimes more) if you are close to the BPO... i do them all the time :) have the agent establish value and support your offer with comps! :)))
- Min & Jimmy OBurns, "oburns"
- Contributions:50
My most recent dealings with BOA did pay closing costs-go figure.
- Sharon Lewis, "Sharon Lewis"
- Contributions:3923
This is an older post but thank you saying the BofA recently paid closing costs....good to know!
Short Sale Closing Costs
Hi, What do you have to do to get closing costs on a short sale? We are going back and forth on a short sale that has already been approved but they sent our first offer back saying they won't pay closing costs. If we offer more, is it likely they will approve closing costs or do they just not do that with short sales? We are the only offer at this time.
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