What is this trend? Asking a buyer to pay money toward the seller’s 2nd loan. I am seeing more and more in the private remarks on the MLS “buyer to contribute $**K toward the 2nd loan”. I saw one last week that asked the buyer to pay $26K to the seller’s 2nd loan. I confirmed with the listing agent that is what they meant to say. It was!
I wonder who is smoking something – Was it the 2nd lender who asked? The listing agent who forwarded the request?
Let me show you how this would play out – You, as a buyer, have an interested in a home listed for short sale for $500K. You plan to put 20% down ($100K). The listing suggests the buyer also “contribute” $10K to the seller’s 2nd lien holder. That would mean you will pay $100,000 + $10,000 + closing cost. Are you kidding me?
Another private remark on some MLS short sale listings is “Buyer to pay a $1500 negotiation fee.” That is because seller’s lenders will not pay that cost, the seller has no money to pay that cost, the listing agent does not want to absorb that cost so guess who they are passing this hot potato to? RIGHT – the buyer.
I hope the short sale process improves. What have you seen?