In real estate there really is no such thing as something being non negotiable. Right now the lender has countered that request you made. Again, you submitted an offer and you don’t have a contract until all parties agree. I assume your realtor had you sign a short sale addendum which spells out these terms a bit more clearly.

Once more, in short sales and reo sales one should not expect the bank to pay for anything. They may and if they do it is a bonus but having expectations that they will leads to situations that mimic this. Your agent should have given you such advice ahead of time.

Similarly if a bank does give in, it is much easier to get a specific amount simply credited back to you. Open ended amounts of money do not sit well at all with negotiators who are forced to deliver bottom line HARD numbers to investors for approvals of liquidations.

So yes you pick a number based on an estimate and either lower the price by that much or ask for a credit but doing it all up front is best.

It is indeed a declining environment for the 10 year treasury so that is good news for you rate shopping wise. Don’t fret over your rate lock. Also my advice would be to never lock a rate prior to lender acceptance in a short sale.

So based on what you said, you do not officially have a contract yet because the lender has pretty much given you a counter offer (at least verbally) which is they will accept all of your terms except paying for termite work. Note that this also implies that if you are expecting any money for repairs that there will be none unless you can talk the seller into it which in a short sale is unlikely.

Finally, your agent should have taken a good look at the estimated HUD that was delivered to the lender and checked with escrow to make sure there are no other tax defaults or liens that were not identified in that HUD. If the escrow company did not get a comprehensive title report from title to generate an accurate estimated HUD then you will get a nasty surprise prior to close of escrow where a deficiency will be identified and nobody will want to pay for it. Essentially the final HUD will be delivered to the lender and it will have deficiencies not identified in the estimated HUD and the negotiator will have to punt on the deal or someone else besides the lender will have to cover the deficiencies…not good.

There are alot of nice deals out there… not alot of great homes but alot of nice deals so yeah I agree that you could get some good deals elsewhere if you like. Next short sale offer you will have some good experience under your belt. You should be able to knock it out of the park!