Last week’s Tucker’s Tip discussed how the initial contract price will usually be changed due to the subsequent negotiations with the Short Sale Lender. All parties to the transaction need to be flexible and willing to renegotiate the contract price and terms based on what the Short Sale Lender will accept.
In a Short Sale, the normal Short Sale Seller should the consider the following goals: (1) Avoiding a Foreclosure, and (2) Avoiding any Deficiency from the unpaid balance of the loan. For the Seller, it is not important “what the original contact price is” as long as these goals are achieved. Remember, the Short Sale Lender will determine for what price they are willing to allow the house to be sold.
Likewise, the normal Short Sale Purchaser usually has a main goal of purchasing the house for as low a price as possible. As long as there is no deficiency for the Seller, the Short Sale Seller should not care what price the Purchaser ultimately pays for the house.
In fact, it is better if the Short Sale Purchaser has not submitted his best offer with the original executed contract. The Short Sale Lender may ask for an additional price increase (based on the “BPO”) and possibly contributions (release of “deficiency”.) Accordingly, as long as the Purchaser still feels he is getting a good deal, the best Short Sale Purchaser is someone who is willing to increase the original price or contribute to the deficiency negotiations.