BiggerPockets

Do a lot of closed short sales result in the sellers still being on the hook for all or a portion of the shortfall? For example, would a home selling for $200k with a loan amount of $370k likely have something like this required of the seller?
If so, it makes foreclosure look more attractive to the seller.
Thanks for help on this newbie question.

Stephen,

The answer to your question is investor specific.

Some other factors that will go into the negotiations are the state's laws regarding deficiencies, the % of the balance recoop'd from the SS, 1st or Jr. lien position., and Mortgage Insurance offsets.

These are the most common factors which play into a decision from our investors.

"Just letting them have it" may still result in a deficiency. At least, it does here in CO. I know that's state specific, though.

I'd say if you're looking at a 4/6 sale date and you don't have an approval yet, and you just got the stuff in two days ago that the odds of crashing and burning are very high.

The person or company that is handling the negotiations on your behalf should be asking to have this foreclosure date postponed while the short sale is being negotiated. That is all that you can do.

If your negotiator has not already done this, then I would recommend that you do not use them on any other short sales, as this is one of the first things they should have taken care of when contacting the lender on this short sale.

You want to always make sure that the person negotiating on your behalf understands how to negotiate for investors. Most negotiators that realtors use only submit the package and don't truly negotiate. A real negotiator attempts to justify the price submitted by emphasizing the repairs needed, the lowest comps in the subject area, the crime rate in the area, any sex offenders in the area, etc. As the above illustrates, a real negotiator identifies anything that can help in the negotiation and presents them in order to justify the price.

At the same time, you as an investor should never start a short sale with the highest price you are willing to pay. The best way to do this is to inform your negotiator what your highest price is for the property, then let them make the submissions. They should start the short sale with a price considerably below your highest price, then during negotiations, work up to that price, if they can not obtain the Acceptance Letter(s) below it. Doing it this way, it allows you to save money, as sometimes the final price can be a lot lower than what your top price would have been.

Hope this helps.