Q: I made an offer on a short sale in Morrell Park. I backed out of the deal because the sellers were using a short sale negotiator who wanted to charge me extra money just for negotiating their short sale. Shouldn’t it be the sellers’ responsibility to pay this person? After all, they are the ones who are benefitting.
A: The seller is not the only party who benefits from a short sale. Short sales are considered “bargains” in the real estate world because these homes can be acquired for up to 20 to 30 percent less, or more, than the average price of a regular, non-distressed home.
In an ideal world, everyone would have enough money that, if you had to sell your home for less money than owed to your mortgage lender, you could afford to bring the extra money to the table to satisfy your mortgage liens. Unfortunately, this is never the case in a short sale. The sellers of short sales are usually facing an undue hardship.
Unlike the meaning its name infers, a short sale is a long and arduous process that helps sellers sell their homes for less than they owe their mortgage lender. They may be able to do this because:
- The home is actually worth less than they owe.
- They would not be able to obtain an offer for much more than market value.
- They do not have the money to subsidize the balance due.
Due to the complexity of the short sale, a negotiating company may sometimes be used to advance this distressed real estate transaction along and see it to completion. Since the home seller is already facing a financial hardship, sometimes the buyer will pay the fee.
Short sales are laborious and very tough to close, so your odds on actually obtaining a short sale property are better with a professional negotiator. An additional fee to a third party, who is negotiating to your benefit, is usually still a deal considering the transaction as long as everything is disclosed to you up front and you know what your acquisition costs are.
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.