by Brad Officer
on Wednesday, November 24th, 2010 at 7:13pm.
Through the last 2 years of becoming very fluent in Short Sales, I've started seeing a growing trend in the cost for doing a short sale. The cost have gone up.....a little.
5 legitimate expenses for doing a short sale based on experience.
Attorney Fees: $500 to retain the Short Sale Attorney. The attorney's office also charges your bank an additional $1500. The additional fee is paid from the closing cost that the bank pays from the sale proceeds. DO NOT attempt a short sale without legal representation.
Repair Items: All the sale contracts that I do are AS IS, however I've been involved in several deals where the seller had to put up some repair money in order for the buyer to get the loan. It's not something you want to do obviously, but when it's either "To short sale or not to short sale" at the final hour it pays to be prepared from the beginning. A little background: FHA and VA are very picky with giving loans and they require the houses to be in tip top shape. Most buyers are FHA and VA, therefore it pays to be prepared - just in case.
Contribution Towards Closing Cost: Banks have gotten more aggressive on this. If you don't have the money, you don't have it. If you do have a good amount of cash on the sidelines and I'm talking well over your day to day living money, the bank may ask you to contribute some of your cash to the closing.
REALTOR FEES and Closing Fees: You don't pay any of these.
Home Owners Association: If you are behind in payments towards the HOA, be prepared to pay a negotiated settlement. The back payments must be cleared in order to close the transaction, and your bank may not be willing to pay the back payments for you. Be prepared.
WARNING: A short sale is a complicated process and it involves your bank taking a loss on you. You should not expect this to be FREE. Be aware of anyone telling you that it is FREE, it's not free. At a minimum you should absolutely have an attorney on your side and that alone will cost you at least $500.
Thank you in advance for Sharing!
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