SS Inspection Negotiations

[Rebekah Fisher]

I am U/C for $107K on a short sale property. The inspections revealed 2 major hidden defects. The sewerline and the roof need to be replaced which could run at least $15K. I have negotiated inspection adjustments on REOs but never on a SS. It's a BofA deal that did not go through Equator. Any suggestions as to how to present my request?

[Scott Hubbard]

You can negotiate defects in the short sale process but do not expect the lender to pay 100%.

1. Get three estimates from reputable licensed and bonded contractors and have them include a built-in cushion in case they uncover more issues.

2. Make sure the materials used are of premium quality.

3. Include the inspection report.

4. Have the HUD-1 changed to cover the average cost of all three estimates as a credit to the buyer.

5. Present a cover letter, along with the other documents, highlighting why you are presenting a counter-offer and explain these are material defects in the property. Conclude they will need to be addressed either as a short sale or as an REO, so why not just make an allownace now.

You can also include sold comps where the properties had similar defects showing the discount if available.

I have successfully countered repair allowances where defects were found. The key is to show the lender they will pay for it one way or another and providing proper support is also critical.
Good Luck!