Buyer pays $4k Loss Mitigation on $100k SFH

3 Replies

Is this mitigation fee too much to pay for a SFH?

Of course it is a short sale.

Rehab is in the $40k-$50k range.

Post rehab appraised value should be in the $180-$200k range.


The loss mitigation fee goes to the expeditor who pushes the short sale through. Consider the fee as a cost of doing business and adjust your bid price accordingly.

They negotiate with the bank to lower the price and without them a short sale might not happen. They are essentially working for the seller but the seller usually doesn't have any money to pay them, the banks require that the seller gets none of the proceeds, so no money is coming out of the sale either.

Most mitigators charge a flat fee not geared to the sale price, so they might charge $4k on a $30,000 sale also.

My most recent purchase was a short sale that came with a $4k loss mitigation fee. The bank was requesting $95K so I offered $91K. After $8K in rehab and closing costs I now have an ARV of $134K. You just have to figure it into your numbers and see if they still work; in my case they did.

I have never paid a loss mitigation fee before. Thanks for the post I learned a lot from it.

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