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mrcj001 · Joined: 16 Jan 2008 Posts: 10 7.19 Dollars($)

1. Are lenders willing to accept short sales eventhough you are not beheind on payments...but may in the near future??

2. How does the closing cost work in a short sale?? Does the seller need to pay out of pocket for closing?? Do Agents still make thier 6%??

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi,

If you sell the property and if the sell price is lesser than what you owe to the lender, then it is called short sale. Here also you will have to pay the difference between the sale price and the amount owe to the lender. The lender will seek you the deficiency Judgment. So I think you can any time sell the property and try to pay off the lender but you should inform the lender about this.

You need to take approval for deed in lieu because in that case you need not to pay the difference of the sale price and the amount owe to the lender.

Best of luck.

blue · Posted: Wed Jan 30, 2008 6:36 pm Post subject:

Hi,

Welcome to Mortgagefit discussion board.

You have to get approved even for short sale. But lenders do accept short sale if you are behind and cannot pay the mortgage. Lenders actually appreciate that you are at least trying to pay off the mortgage. And it is better than DIL or foreclosure.

Actually buyers pay the closing cost but if the seller is in need then he also pays it partially.

Do let me know if you have any other questions.

Thanks
Blue

Posted: Wed Jan 30, 2008 6:51 pm Post subject:

Blue,
I noticed you are from Maryland. The property is located there, near DC. My Son is military and he has orders to relocate and needs to sell his home,but I`m sure you know in your area,values are down. The home is not worth what he owes on it and even if he rents it out, he still wont be able to cover the mortgage.
He will have to rent at the new location...trying to pay rent and a mortgage is going to be hard to do. He has excellent credit and no payments missed.

He (we) really dont know what to do....

Caron · Posted: Thu Jan 31, 2008 12:44 am Post subject: RE: short sale and closing costs

Hi Mrcj,

Welcome back.

Usually lenders won't agree to a short sale until and unless you are behind on the loan. Generally when a borrower is behind on payments and feels he'll not be able to make payments, he needs to submit a hardship letter mentioning clearly why he cannot cope up with the payments and why he wants an alternative way out. View a Sample hardship letter .

In a short sale or in any usual sale, the seller can pay for the closing cost under the table by giving you a check after closing. Another way is to make your mortgage broker or real estate agent cut down their fees so that you can make way for the costs. Just see that you can make profits from both ends so that you are able to pay the closing costs.

Feel free to discuss further.

Good luck

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Hi Guest,

Although lenders do not usually consider a short sale if payments are not behind, I would still apply for it. He may have to get a supervisor involved to explain that if the short sale is not approved then he will get behind, go into foreclosure and will result in a worse situation for the bank. They just want to know that it is in their best interest to do this short sale, so have him make a good case.

girlndebt · Joined: 02 Feb 2008 Posts: 11 5.77 Dollars($)

I sold through a short sale last year. I had the same concerns especially since I had never even heard of a short sale before.

My lender paid ALL closing costs and 5% commission to the realtors and credited the buyers some cash at closing for repairs. I went to closing with nothing and left with nothing. This all needs to be negotiated before you get to the table. Depending on your situation, the lender will not offer this. In my case it was either this or take the house back. They chose this.

If you decide to use a realtor, make sure you do your homework and choose someone who has proven experience in short sales.

sara · Posted: Mon Feb 11, 2008 12:21 am Post subject: RE:

Hi Gilrindebt,

That's good on part of your lender to have paid the buyer's closing costs. may be the lender wanted to wrap up with the closing fast. I hope the realtor in your case was a good one to deal with. It's worth spending some time finding a good realtor.

Anyway, thanks for sharing your experience.

girlndebt · Joined: 02 Feb 2008 Posts: 11 5.77 Dollars($)

Actually our realtor was the worst. That is why I always try to stress the importance of having a good one. The deals with the lender came from my husband and I who knew nothing about a short sale. It is amazing how fast and how much you learn in a desperate situation. If we had a good realtor, it would have made our lives so much easier.

The bummer is, he met with my husband and I once to sign the listing agreement. He listed the house but that was where it ended. We showed it, dealt with the bank and went through the stress. He did not even show up to closing. After going over the paperwork, I seen he was paid the commission. Apparently since it was "his"listing that brought the buyer, he was entitled to it. I was furious but it is over and done with. Lesson learned.

Samantha · Posted: Tue Feb 12, 2008 12:51 am Post subject: RE:

Yes, quite appropriately. It is only when you are in trouble that you come to know across new things and even in the midst of stress, you can learn them so fast and wouldn't even forget them throughout your life. Things can be so stressful! But that was unfair on part of your realtor to have not attended the closing.

May god bless you.

Samantha

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I am behind on payment - will lender accept short sale?