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Archive for June, 2010

Short Sales and Seller Concessions- Important Update!

A warning for short sale buyers! Well… maybe warning is too harsh a word. How about pearls of wisdom? Semantics aside this is a pretty important issue.

Right now I have a short sale going with Wells Fargo on the listing side. For various reasons this sale has been going on longer than it should have, but yesterday our new negotiator informed us that Fannie Mae has new guidelines regarding seller concessions.

We had short sale approval a couple months ago with seller concessions of 3% to pay some of the buyer’s closing costs. Circumstances required a new approval and a new negotiator – and new guidelines. Fannie Mae is the investor who bought the seller’s primary mortgage. 3 months ago they allowed for up to 3% in seller’s concessions. Today they are allowing no more than $2000 in seller’s concessions.

So, if you have an accepted offer waiting for short sale approval, and that offer contains seller concessions – be prepared for a counter offer. Start saving your money today; there’s a very good chance your seller’s primary mortgage is a Fannie Mae backed loan.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email:
Jackie@JackieHawley.com
web: www.MiRelocation.com

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Buying a Short Sale Listing- Negotiating Tips- Part 1 of ?

Since about a quarter of the home sales in Southeast Michigan are short sales, I thought I should start posting more articles about some of the tactics my buyers have been using when negotiating with a seller.

Basically a short sale is when the seller owes more than the house can sell for and is unable or unwilling to bring the difference to the closing. In those instances the seller is asking the bank to reduce the mortgage payoff in order to produce clean title at the closing. Please go to my short sale page for more detailed information or click on the short sale tag to the side of this post.

One thing a buyer needs to remember is that the seller is walking away from the sale with nothing but their personal property and bad credit. There is also the possibility the bank may reserve the right to sue the seller at some point in time after the closing- I believe they have up to 10 years in Michigan.

Why does this affect you, they buyer? Because the seller is the one you negotiate the sale with and the seller’s motivations on a short sale are different than on a normal sale. It’s not all price. Remember- the seller is not walking away with any money, so we need to explore other options to make your offer attractive to the seller. I think about 75% of my sales this year have been multiple offer situations and unlike the old days the highest bid may not be the best.

So some basic advise– don’t ask for appliances. Don’t ask for the boat or the dock. Don’t ask for anything that is not being offered in the listing. Remember- the seller is walking with nothing but bad credit. Even if you offer full price the seller may still reject or counter your offer or choose another offer. I would hate to have someone lose a house over something as petty as a stove.

Another tactic that worked for me recently when in a multiple offer situation- we offered 45 days free possession after closing. According to the listing agent that was the deciding factor for the sellers, and my buyers are getting a home they love at a terrific price.

Please come back for more negotiating tips. This is a home buyers blog written for the Southeast Michigan home buyer.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email: Jackie@JackieHawley.com
web: www.MiRelocation.com

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