Yes, you can negotiate closing costs on a short sale, but final approval rests with the seller's lender, not the homeowner. While lenders often require the buyer to pay their own closing costs, it is possible to negotiate a seller credit—typically around 3% of the sale price—to cover buyer expenses. All concessions must be disclosed and approved by the bank.
In a short sale, the offer is negotiated with the seller, just as in a traditional sale.
Usually, the homeowner is responsible for paying both closing costs and the real estate agent's commission. However, in a short sale, the lender typically covers these fees.
Negotiable Closing Costs During a Home Purchase
Although less severe than foreclosure, a short sale can still negatively impact the seller's credit score, making it harder to be approved for new loans. Lender approval requirement. The bank must approve the short sale, which can take several months and may delay closing. Potential for a deficiency judgment.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
If you're purchasing a short sale, your goal should be to make an offer that reflects the realistic value of the property while also considering any necessary repairs. A fair offer that aligns with market value—supported by a strong preapproval letter—goes a long way.
Most short sales I close take 6 months to a year, this is with a short sale negotiator/atty involved. You should be aware that a lot of times the bank won't let the seller pay for some charges that they might typically pay so the buyer has to pick them up.
In most short sale transactions, the lender (mortgage servicer) pays the real estate commissions, not the homeowner. The commission is typically negotiated and approved as part of the short sale approval process.
Since the home is being sold for less than what is owed on the mortgage, the lender typically covers most of the closing costs as part of approving the short sale. > That said, lenders evaluate each case individually. If certain fees are not approved, the buyer or homeowner may have to negotiate them separately.
The 70/30 rule in negotiation is a guideline to listen 70% of the time and talk only 30%, focusing on asking open-ended questions to understand the other party's needs, motivations, and obstacles, thereby building trust, empathy, and finding collaborative solutions, rather than dominating the conversation with your own agenda. A related concept, the 30/70 rule, shifts focus: 70% on preparation (IQ) and 30% on discussion (EQ) early in a relationship, then potentially shifting to more EQ (emotional intelligence/rapport) as the relationship evolves.
Yes, 3% is a very common and normal commission rate for a single real estate agent (buyer's or seller's), with total commissions often reaching 5-6% split between both agents, though these rates are always negotiable, especially with recent rule changes in the real estate industry. While 3% is typical for each side, you can negotiate lower rates, but be aware offering less might result in fewer showings or less effort from buyer's agents.
Warren Buffett's #1 rule of investing is famously simple and stark: "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.". This principle emphasizes capital preservation and avoiding significant losses, suggesting that protecting your principal is more crucial for long-term wealth building than chasing high, risky returns. It means focusing on buying good businesses at fair prices, understanding what you invest in, and being disciplined to prevent large, permanent losses, even if it means missing out on some fast gains.
Though they are often bargains, short sales can have pitfalls for buyers. Drawbacks aside, short sales can be real estate gold mines if you know how and where to look. Just don't forget to work with a real estate agent. You'll need their expertise when navigating the market!
And there are practical reasons for being wary of shorting. Short selling exposes investors to theoretically unlimited losses if the stock price rises, leading to dramatic “short squeezes” where forced buying by short sellers drives prices even higher.
Government-backed FHA and USDA loans often offer down payment assistance and closing cost benefits to borrowers. Many states also offer state-specific programs to help single mothers, low-income families and others access closing cost benefits or down payment assistance.