The Bank Cares About 1 Thing, Net Proceeds
The leaders of Group 46:10 are currently in Italy. So, thanks to a little good scheduling and meticulous preparation, this week’s topic of counter offers from banks didn’t need to wait a minute longer to be presented. There are primarily two types of counter offers that are being discussed. First, the collection counter offer, which is when a lender worker wants to counter for extra money simply because they want more money or because they don’t want to pay the commission. The next type of counter offer is mitigation counter offer. With this type of counter offer, the lender employee is countering the offer for the reason that they would yield extra money taking the residence to foreclosure than they would if they accepted the short sale.
The single way to figure out which type of counter offer you are getting is to know the BPO value. In order to figure out the BPO figure, you need to do a little detective work. Also, bear in mind that when you are working with a mitigation counter offer you should never have a discussion about purchase price. The conversation should always be regarding net proceeds.
We appreciate that the sum of money the bank will receive is resultant from the purchase price. However, with all of the other fees and commissions that are attached to a deal like this, there are many ways to increase the banks net proceeds without increasing the purchase price. Closing costs, taxes, HOA’s, commissions, title and escrow fees and other stuff like that can help the bank keep their net proceeds high.
Keep all of this in mind when you are dealing with counter offers and banks. Still, bear in mind that if you don’t know what sort of counter offer you are working with, you are putting yourself in a hard negotiating situation.
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