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Negotiating A Short Sale

Tuesday, March 04, 2008

Recently, we have experienced a surge in short sales, many of which have had negotiations begun by the listing agents. While that is a proactive approach to the transaction, I am seeing issues with the HUD’s that are being prepared based on the offer and term of the contract.

In a recent transaction, the listing agent had negotiated the payoff of the second and had approval in writing by the payoff lender.  As the parties neared a closing date, we received the title report back to discover that there were other liens on the property, one was for a third mortgage and the other, a lien from the homeowner’s association.

We now were required to reopen the negotiation process with the payoff lender and see if they were willing to reduce their payoff even more than before to include and satisfy both of these additional liens.  In this case in particular, we were dealing with parties that were willing to be flexible and had the mindset that “something is better than nothing” and we were able to settle the transaction.

The lesson to be learned is to make certain, before entering into negotiations with the payoff lender, that you have checked the title or have had a title company check the title for you.  This case was an exception to the rule because all of the parties were willing to compromise, we have not had that same experience across the board.

Should you have any questions regarding short sales or any real estate issue, please feel free to contact us here at Confidence Title.

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