Lotus Realty Group

COMPROMISE SHORTSALES

When you are pre qualifying your sellers, you are looking for 3 things. 1. Change in income 2. Insolvency 3. True Hardship. When the lender is presented with a short sale, that lender has a number of options depending on a number of factors , including whether that lender feels that your seller has a true hardship and has no other assets , or whether the lender feels that the seller might be able to repay, at least a portion of the money lost by the lender in agreeing to the short sale

As a condition to agreeing to a short sale, some lenders can ask a seller to do one of two things. Either make cash contribution or ask the seller to sign a promissory note for all or part of the banks loss.  This could also be secured by a deed of trust on other property owned by the seller.

These are called "Compromise Short Sales." The seller would have to decide which terms to accept or cancel the contract.

We need to makes sure we are pre qualifying homeowners and that a short sale makes sense for their situation.  Set the expectation. They need to be aware of what a lender can potentially expect from them in order for them to accept a short sale and for the homeowner to make an informed decision.