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We are Your Negotiator!
The Loss Mitigation Center will deal with all the tedious tasks required in a short sale. We will work with you, the sellers, and real estate agents towards getting your offer approved from the seller's lender. Once we receive the short sale approval letter it will be submitted to the title company so the closing can be scheduled and finalized.
You can turn to us for questions about the process and the status of your offer. We are always happy to provide answers, updates, and guide all parties involved through the process.
How long is the process and the timeframe for approval?
With your offer, we will complete the short sale package and submit it to the lender(s). It can take up to 90+ days for the short sale to be approved and the acceptance letter to be received, plus an additional 30 days to close. If a foreclosure sale date is less than 10 days away we will focus our efforts to postponed the sale and allow you enough time to close. Keep in mind that the offer must meet the NET Proceeds amount the lender(s) expect in order to successfully get it postponed.
How are you compensated?
We are hired directly by the sellers for a 2% fee of the final purchase price. This fee is split between both you and the seller. The most common question we are asked about our fee is, "Why am I asking to pay one-half of the seller's fee?" You benefit as a direct result of our efforts towards getting your offer approved.
We work hard towards getting that approval letter from the seller's lender. Our fee is only earned if the Loss Mitigation Center is successfully in getting your offer approved by ALL lien holders.
Need more information? Send a email by completing the Online Assistance Request.
Will the Loss Mitigation Service Fee cause me to have to pay more for the home?
No. It is our recommendation that you adjust your offer by taking into account that you will need to pay a portion of our fee at closing in addition to the purchase price. Many of our buyers reduce their proposed purchase price by the amount of the Buyer’s share of the fee or ask the Seller to pay for it through a concession or credit to you as Buyer. Important: Make sure you talk with your lender to determine if they will allow our fee to be paid by you.
What happens if the seller's lender declines to pay the seller’s part of the Loss Mitigation Service Fee or other closing costs?
Most lenders are willing to allow the seller to pay for the Loss Mitigation Center negotiation services. However, some lenders and/or their investors have a policy against these fees. In these instances we require the real estate brokers to split the unpaid portion between both brokers. Our fee from the seller is 1% of the purchase price, and it split by each real estate broker for a half percent (.5%) from each.
In some cases, the foreclosing lenders may refuse to pay for additional seller closing costs. These may include, but are not limited to: Release / Re-conveyance Fees, Document Preparation Fees, Courier Fees, Overnight/E-Doc/Wire Fees, Water / Sewer Escrows, Miscellaneous Title Fees, HOA Transfer Fees and HOA past due balances. If the foreclosing lender refuses to pay these costs, we ask you as the buyer to absorb them. Overall, you will be buying a home at a great price. It's still a win-win purchase.
How much should I offer?
Before you determine your offer please consider the issues identified above. Of course, you can submit any purchase contract to the seller you desire. This market is considered to be a "buyer's market" and buyer's and their brokers believe that they can present a low offer and think it will be accepted. From what we have seen, this is not the case.
Short sales is a very competitive market. If you plan to present a "lowball" offer be aware there may be a longer the acceptance window and increase the possibility of getting countered by the foreclosing lender. Loss Mitigation Center reviews all contracts and determines if they are in the realm of possibility, meaning, is the lender likely to accept them. Cash offers and offers with quick closing times carry more weight than those which are contingent on a loan. To increase the possibility of getting your short sale offer, always make your highest, best and cleanest offer at the outset.
Can the seller pay concessions or incentives?
Typically, accepted offers that have closing costs included are close to or above the list price. If your offer is based on a steep discount we may suggest that you submit an offer that is not full of contingencies or request seller concessions. Any closing costs requested that are larger than 3% may require a copy of your Good Faith Estimate to be included with your offer.
Conditions to consider when submitting an offer to purchase?
- You understand our involvement and agree to pay our fee and miscellaneous closing costs not paid by the foreclosing lender as part of the transaction.
- You must be patient. Short sales can take a long time and because of the large amount of foreclosures in the country, the lenders are extremely backed up. Allow a minimum of 60 days for approval.
- Your offer cannot be contingent on the sale of another property.
- The property must be purchased "As-Is".
- You must be able to close within 30 days once the short sale has been approved.
- Your Broker must allow for a reduced commission if required by the foreclosing lender.
What else do I need to know?
The seller is relying on you to perform as agreed and continue in good faith to close the transaction. This is a team effort and you are part of that team as buyer.
Can the seller remain in the property as my tenant?
No. Stay away from these at all costs! Two big reasons are: 1) The lender will not allow the seller to receive ANY benefit if the lender is taking a loss. To do so is fraud. Your involvement could be construed as assisting the seller in committing bank fraud. 2) If you set up rent payments with the old seller and they stop making those payments, you would have no choice but to evict them. Once an 'angel' investor, you would now fall under scrutiny for trying to protect yourself. Sellers in denial and distress may then claim you were "making them a loan" or present some other legal defense. This is the primary source of "Foreclosure Rescue Scams" you hear about in the news and the primary reason why investors end up in front of a judge with pre-foreclosures even if they meant well.
The Loss Mitigation Center cannot guarantee the outcome of any short sale we are working on, since we only get paid upon a successful closing we are very persistent in gaining their approval.
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MANDATORY FTC DISCLOSURE: We are a for-profit company. The Loss Mitigation Center is not associated with the government and our services are not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage you could lose your home and damage your credit rating.
IMPORTANT: We DO NOT provide the services of nor do we act as bankruptcy counselors, attorneys, lenders, accountants, financial planners, financial counselors, nor are we a debt relief agency. The content of our website is not legal advice and represents our opinions only.