How to Negotiate a Short Sale
Lots of questions come up about how to negotiate with the bank on a short sale and with 30% of the Homes for sale in Boise, Meridian and Kuna etc. listed as short sales , I thought I’d address the issue here as a reference for you!
One quality of a good buyers agent is the ability to negotiate.
The problem however is that most people don’t really understand what negotiation really means…especially buyers. And, with the tax credit deadline looming, you might not want to get caught up in a short sale transaction at all!
3 elements of negotiation
The 3 elements of negotiation are: Process, behavior, and substance. They don’t really exist in a short sale.
Process: You have no access to the actual negotiators at the bank other than your offer/HUD 1 Statement.
Behavior: You have no access to directly persuade the investors at the bank.
Substance: The property itself is an asset, performing or not, that has a concrete value attached to it by the investors. If you don’t like their price or terms, there is very little you can do beyond submitting counter offer after counter offer to see where they finally say no.
Basically, there is little persuasion that can be done in a short sale. I’d focus more on finding the agent who can facilitate and work a short sale process ( like me 
) more than I would focus on who can negotiate.
Lastly, when it comes to real estate negotiation, there is little room for negotiating on irrationality or principal. Most negotiating is done based on facts. Concrete market data just might rob you of any “smoking deals” that you or any other buyers may feel entitled to.
At best, in real estate, good negotiations will result in both parties either making a sacrifice OR both parties making a gain. Rarely does one (with good representation) get taken complete advantage of by result of ‘good’ persuasion.
Join the forum discussion on this post
Related posts:
{ 3 comments… read them below or add one }
At http://www.gohoming.com, we continue to evaluate the short sale market and the entry of those properties. It is this type of negotiation that makes it difficult on the buyer. Upon a deed in lieu program and going to the foreclosure and eventual REO property seems to be a much smoother transition.
When making offers on short sales, get a solid market value on the subject property. Be prepaired as the buyer to make your highest and best offer the first time, many short sales are listed under fair market value but that does not mean the bank will accept a low ball offer.
As frustrating as the process is, a deal struck in a short sale is like no other. Yes, it is a long gruesome process of negotiating, but if you hire someone to handle it for you and stand strong, you will be happy in the end.