What does a Short Sale Negotiator do?

Mary McMahon
Mary McMahon

A short sale negotiator works with a bank in a short sale transaction, where the goal is to sell a home for less than the value of the mortgage to prevent a foreclosure. Depending on the situation, it is possible to still owe the bank money after the sale goes through. People should discuss this possibility with their real estate agents and attorneys to make sure they understand what will happen after the short sale. The short sale negotiator's job is to facilitate the process to the satisfaction of sellers, buyers, and banks.

Short sales can be profitable for negotiators if they can work out a good deal with the lender.
Short sales can be profitable for negotiators if they can work out a good deal with the lender.

In a short sale, a person with an outstanding mortgage requests special permission to sell the home for less than the outstanding value of the mortgage, usually because the property value has fallen dramatically. Homeowners in this position may have a variety of reasons for wanting a short sale. Banks are often reluctant to agree because they would like to recover the full amount of the loan. They may choose to push through with foreclosure proceedings to see if they can sell the home at auction and recover the funds or sell it on their own after taking possession.

It is in the best interests of both the seller and the lender if a short sale property sells quickly.
It is in the best interests of both the seller and the lender if a short sale property sells quickly.

The short sale negotiator acts as a point of contact for the bank, the buyer, the seller, and other parties involved in the transaction, like real estate agents. These real estate professionals are familiar with the short sale process and they know all the tricks and loopholes to exploit, ranging from challenging the assessed value of the home to force the bank to accept less, to knowing who to call when it comes to locating “lost” paperwork.

The goal of a short sale tramsaction is to sell a home for less than the value of the mortgage to prevent a foreclosure.
The goal of a short sale tramsaction is to sell a home for less than the value of the mortgage to prevent a foreclosure.

This work requires patience, stubbornness, and diligence. Short sales can take months and often fall through as people deal with issues like banks refusing to back down on how much they think the home is worth, misfiled and lost paperwork, and problems for homeowners who may be about to enter foreclosure because they cannot keep up with payments. The short sale negotiator spends a lot of time on the phone discussing aspects of the deal and may also need to meet with people in person. Fast action is also necessary, as a bank may be sluggish for weeks and then abruptly issue a document requiring an immediate response.

Licensure requirements for this type of work vary. In some locations, the short sale negotiator must be a licensed real estate agent. In others, the law may be more flexible. People considering employment in this field can look up the requirements with the government agency in charge of monitoring people who work in the real estate industry.

A short sale negotiation is meant to avoid a foreclosure, even if it means selling it for less than the value of the mortgage.
A short sale negotiation is meant to avoid a foreclosure, even if it means selling it for less than the value of the mortgage.
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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