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Short sale - can still negotiate?

There is a condo listed at $175k in Southern California and it is a short-sale. I submitted an offer at $180k because i knew there was another offer already in. I now got back a counter offer stating the Seller: declines to pay for home warranty, declines to pay for any work/renovation (needs painting, flooring is half finished, shower needs repair), and requesting Buyer to pay $3k in HOA Arrears and Assessments.
My question is: because it is a short sale is there any other negotiation I can do, or am I at Seller's mercy because of the multiple offers?
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June 13 2012 - Mission Viejo
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Profile picture for user84241382
Can you get a bank to reassign a mortgage after property is Already listed
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March 03
Profile picture for carenkerr3

A short sale is a choice to foreclosure when a homeowner needs to sell & can no longer afford to make their mortgage payments. Means seller is not able to pay enough money for things . After buying any home you need to spend extra expenses on repairing  or anything. You should take advice or help from legal gent who specializes in short sale negotiations.

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November 14 2013
You should work with a buyers agent who specializes in short sale negotiations. To answer your question when there are multiple offers on a short sale, usually seller has the upper hand. You never have to accept any counters or offers if you do not agree to them. 
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November 13 2013
You are not obligated to accept their counter.  You can walk away from the deal if you like.

The consideration is how it compares to normal market sales.  If you are getting the property sufficiently below market to cover the repairs, HOA and extra expenses, and still save money, then you it is probably still good.    
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June 15 2012
Think of the seller as the "Gatekeeper".Your offer is NOT going anywhere UNTIL the seller signs off on it and until THEY are happy with it.
Sellers usually have NO funds and NO reserves.
Do not be upset about those parts of the counter,as ALL short sales typically will NOT do repairs or pay for anything.

If you need a seller to provide that,you need a regular sale NOT a short sale.
If the home is in poor condition,be aware your financing might not pass the home.Half finished flooring is an issue with some lenders in some states. Make sure you do not get into this and wait all this time,and your lender will not pass the loan.
There are 203K mtgs that you can use ( if you are not going conventionally ) and they are awesome products. You would need to take a little risk and do your inspections and bids in your waiting time as they take longer than other loans.That is another option you need to discuss with your agent.

When I represent sellers I ALWAYS make them counter their offers,especially if they are multiple offer situations.

You are either at the sellers mercy or the lender and that shoe will drop a few months down the road.
HOPEFULLY the HOA will not take a Lawyer on as a retainer and that 3,000 HOA fee can double if they do.

The bottom line is ,do you like the home? Can you wait? and EVEN IF you had to pay all the costs is it worth it if you do get it?
For some short sales are far from SHORT and can be less than a real SALE.

I am seeing BANKS countering offers up 10% - 20%.Houses are going up and they do see there is room to counter.



To many times the homes are listed way to low to get attention and get any offer signed off on to send to the bank.


I lost count on how many agents get mad that we counter our offers.
Regardless of the fact the seller is NOT making any money,they are asking the bank to forgive them ( or HOPE they forgive their balance).

If for ANY reason in the future ( I expect this to happen) a collection agency buys the old short sales files and chooses to harass the past sellers you can rest assured the past sellers will be at a lawyers office wanting to know WHO and WHY they did not try to counter all offers?,or WHY the home sold lower than it should have? Did the Realtor do ALL they can to promote the home and sell it for the best price?

Everyone will want someone to blame and when money is owed and at the root of it.

If you think I am wrong,I will show you lawyers that are already using this marketing for new clients .They are seeing clients at their offices now from sellers that did short sales 4 years ago. Their marketing is " who is to blame for the extra money that was left on the table"

The obligation of the Listing agent is to get the MOST money and best terns for their seller. Many times people forget there is STILL a seller and that includes the Bank as well.

If you want the house,it is AS-IS and you have funds for repairs,can get loan approval on it and can wait...AND you still think it is a value,..go for it!
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June 15 2012

As you are experiencing a short sale is not the deal most think it is. As you see, they are trying to get the most they can like any other seller and are unwilling to do much if anything.  You are not at their merci, you can go buy another property unless you think this property is worth much more than the asking price.

Unless you have extra cash  I do not believe the lender will lend you to pay HOA fees, an FHA, VA  and even conventional lenders would not approve release of funds under the condiitions of the home.

My opinion is do not waste your time get out and find a decent property from the many private sellers
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June 14 2012

Negotiating a short sale listing is difficult because of the need to obtain the lender's approval for a sale. You can always ask for something and the seller can agree, but the lender ultimately may reject the terms. Add to that the existence of multiple offers and asking for too much can prompt the seller ad the lender to toss your offer into the trash. If the price is significantly below market value, then, in a multiple offer situation on a short sale property, you probably don't want to press negotiations and submit an offer basically sticking to the listing requirements. Otherwise, just walk away. In today's market, there is always another house whose owner may be more willing to negotiate over the terms.

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June 14 2012
Hi User 2961390

It is true, short sales are priced lower than the appraised price for the most part because the seller no longer has the ability to pay the payments for the home and do not have the money to make improvements or to pay for a home warranty.  The seller accepts an offer which is typically less than what they owe on their mortgage in hopes that the bank will accept and let them out of their mortgage.  Hopefully you were able to get a great deal on the home so that if you pay for the improvements and the HOA that you feel that you have still gotten the home for less than the appraised price or at least equal and still love the home.  If with those improvements and HOA fees you come out paying more than what the home is worth and you have your inspection deadline to cancel the contract.
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June 14 2012
In short sales you can negotiate yourself out of the sale very quickly. Discuss their counter with your buyer agent so that you will not overbid You do not say how you will be paying...FHA requires that flooring be in place and there cannot be any chipping paint. HOA fees are a lien on the property and need to be paid prior to closing. Depending how much the comps are and how much you want the property you may have to pay or walk out.
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June 13 2012
Profile picture for B Mike West
When a home is offered as a short sale the seller is not suppose to have enough money to pay for things like a home warranty.  If their hardship is genuine they probably do not have enought to pay the HOA dues or fines. Your options are to agree to their terms or to walk away.  SHort sales are prices below market for a reason and it is unrealistic to expect a short sale seller to act as a normal seller.
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June 13 2012
 
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