The lender holds all the cards… I forgot the posters name that commented on a thread last week who worked in the loss mitigation group for a loan servicing organization. He was really helpful.
My guess is as follows. First off it depends on how far down the seller is in the hole. If the home is already NOD status and a date has been set for the trustee sale, the lender would probably not negotiate much and simply follow through with the foreclosure unless the short sale amount was significantly more then the opening bid.
I think that the psychology of these darn lenders still needs to get battered some more. The fact that we are seeing short sales on the market for months and months indicates these lenders are still out in space. So all things being equal a cash offer will be much more attractive to a lender then a financed offer. However I don’t think I can answer your question which is, “What sort of premium is my cash offer worth?” 5% better then a financed offer? 10% better? Not sure…I gave up trying to figure out these lenders long ago…
