Correct way to counter offer Loss Mitigation

Hey all,

This is an FHA loan therefore the least they could net is 82% of the appraised value. My question is what can I negotiate? I have the appraisal but it is a bit too high for me to work with. Can I negotiate the closing or maintainance cost, get a reappraisal or see if I can get them to pay back taxes etc…??
Please Help…

Found this info on a website:

quote/ Mark,

FHA short sales are and will be the easiest short sales you will ever work. We specifically teach agents how to effectively facilitate their short sale transactions, whether they’re FHA, VA, or Conventional short sales…with 2nd liens. We have taught over 150 seminars and, in fact, with First American Title sponsoring our seminars, we’ll be teaching in your area this summer. The reason why FHA short sales are so easy is because there is a systematized process defined by HUD that absolutely has to be followed when doing the short sale. The lenders have no “free reign” to do anything outside of what is already defined by HUD. Here are a few things to know that will hugely help you regarding FHA short sales.

The Seller must be approved into the pre-foreclosure program before the lender can consider any offers. This approval is evidenced by you receiving HUD Form 90045 from the loss mitigation rep at the lending institution. This form is titled “Acceptance into the Pre-foreclosure Sale Program”. This form will also reveal what the appraisal ame in at.

FHA loans are insured at 82% of the current market appraised value. Therefore, in order to approve an offer on a FHA short sale, the net proceeds that the lender has to receive at closing MUST be no less than 82% of the appraised value, which is referenced on the HUD Form 90045. This means that you MUST ensure that everything in the transaction that will be paid (i.e. commissions, closing costs, liens, judgments, seller incentive, prorated taxes, etc.) has to be accounted for before reaching the 82% threshold. The lenders will not take a penny less! The biggest reason why agents are losing commissions on their short sales nationwide are because they unknowingly meet the lender’s net threshold, but there isn’t enough to pay their commission! Don’t make this mistake.

Once accepted into the pre-foreclosure sale program, HUD gives the Seller 90 days to sell their home under the terms of the program. They are required to postpone all foreclosure proceedings in the meantime.

FHA provides a seller incentive of no more than $1,000 to the Seller if they come under contract and close within the 90-day period. That’s right, a gift to the Seller. This is reduced to $750 if the property comes under contract in the 90-day period, but doesn’t close until after that period. EXTREMELY IMPORTANT!!! - There are some closing costs that the lender will not pay for on behalf of the Seller at closing. They will not pay for a home warranty, HOA delinquent dues, HOA transfer fees). The seller incentive CAN be used to pay for these items. Otherwise, they come out of your commission!

The Buyer absolutely cannot gross up the sales price to cover Seller concessions on a FHA short sale. HUD won’t allow it.

These are just a few things we want to point out. Working a FHA short sale requires a different strategy than working a VA or Conventional short sale. Know the difference! We recommend that you view our training resources and materials on our website at We’ll see you in Dayton!

Michael Spickes

America’s Home Rescue /quote