Net Proceeds Inside A Short Sale Deal
Rounding out a great week of matter on lender counter offers, there are still a few good stories to tell. Kevin and Fred haven’t been very volatile this week, but they are on vacation in Italy. So, we should all give them a break. As is habit with Friday, it is time for a narrative.
Recently there was a situation with Aurora Loan Services. Kevin and Fred knew the BPO on this short sale because they had a previous offer that was accepted, but the buyer cancelled. So, Kevin and Fred got a new offer with all of the normal fees and closing costs. Nevertheless, the negotiator told the Group 46:10 workers that the closing costs needed to be removed. Initially, Kevin and Fred were not certain if this was a mitigation counter offer or a collection counter offer. However, they eventually learned that the counter offer was concerning net proceeds. Through a little exhaustive paperwork, they were able to decrease the closing costs because of a few taxes that had already been paid.
In essence, Kevin and Fred simply wanted to know what the bank needed to claim in net proceeds with this loan.
Herein lies the basis behind the whole week of conversations on counter offers. The negotiator let Kevin and Fred know that she needed to net $266,000 to get this agreement done. As soon as all entities had the equal information, they could all work to get to the same position and close the deal.
The end consequence is that the negotiator was trying to net about 85% on the deal and there was a second note that needed a few thousand dollars. Basically, when everybody shares what they need from a deal, the transaction can get completed. Net proceeds are the lone thing that matters!
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