Large short sales incentives?
I had a short sale seller call my office the other day because he wanted that humongous short sale incentive that is offered by Chase Bank (up to $40,000). In the phone call, this seller expressed anger that Chase was holding back and not giving him the money he deserved. He actually blamed his agent for her “incompetent” negotiation style to boot.
So, let’s clear the air on this big short sale incentive that is offered by Chase (and also Citi and SPS, on occasion).
First off, my disclaimer: I do not work for Chase Bank. Never have, and everything I say here is based on my own experiences working with banks and closing hundreds of short sales.
Nobody at Chase bank was trying to get this seller’s goat. And, while I do not know anything about this listing agent, I’d bet dollars to donuts that the seller did not qualify for the short sale incentive; that is why he did not get it. Plain and simple.
Qualifying for the incentives
Chase is a servicer, and while they likely service many of their own notes, they also service notes for other investors (e.g., Fannie Mae, Freddie Mac, and many private investors as well). There are certain guidelines that loans need to meet in order to qualify for the ginormous incentive. Not all loans at Chase meet these guidelines, and the employees at Chase (once your short sale package hits the bank) are more than happy to tell you whether your seller’s loan will qualify for the incentive.
I’ve seen a seller with a purchase price of $145,000 receive $20,000 at closing. I’ve also seen a seller with a purchase price of $638,000 get an incentive of $35,000 at closing. I’ve also seen lots of stuff in between. In many cases, the sellers receive a letter in the mail that offers them the incentive, and for others (who likely did not even open their mail) the bank negotiator has advised us that the seller will qualify.
The thing is that just because your seller has a loan with Chase does not mean that s/he will qualify for the money. What’s the saying… “You can’t get blood from a turnip”?