SHORT-SALE IMPASSE - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 30, 2006 at 21:07:21:

The first lender ordered an appraisal. Either my good selling job to the appraiser or the true facts of life brought the appraisal in at $360. With some rehab, the property should fetch about $480K at RETAIL. So my profit will consist of roughly the discount I can secure from the two lenders combined.

SHORT-SALE IMPASSE - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 29, 2006 at 18:18:04:

I’m trying to put together a short-sale, and the 1st and 2nd lien-holders both say that they cannot accept an offer until THE OTHER gives a commitment letter first.

The first is friendly enough, and verbally speaks of having some leaway in dealing with me. He has faxed me a non-binding counter-offer that is too high anyway. The rep from the second (a big lender), says that until I get a firm commitment letter on the first’s letterhead, they will not submit my offer to committee. He said that they know they will be wiped out at auction, but the dense-sounding rep refuses to bother his supervisor with it. I have left two voicemails for the supervisor in the last month, but she does not return my calls.

We still have about three months until auction, but I am not in a position to buy it at auction. Any help or ideas?

Thanks, as always,
Jerry in Illinois

Re: SHORT-SALE IMPASSE - Posted by Joe Kaiser

Posted by Joe Kaiser on March 29, 2006 at 20:49:12:

Did they return your check uncashed?

Joe

Get used to it. - Posted by DaveD (WI)

Posted by DaveD (WI) on March 29, 2006 at 19:06:50:

Whoever is bringing the action is in charge. That is who you deal with first. If it is the first, they couldn’t care less about the second. They are jerking you around. The numbers of your deal will specify what your action plan should be. Once the second knows the first will deal, they will as well. Because they just got a preview of coming attractions of what is likely to happen at auction. That’s why they want to “peek” at your cards.

I had a second call me some time ago to ask if I would bid at an auction to save his position. Think it was about 18K. The auction was the following week. I said naw, but if he wanted any salvation I’d give him a thou for his position. He said no, the corporate office didn’t discount their notes. Whatever. So instead of a thousand, they got wiped out at auction. No, it still wasn’t a deal for whatever it sold at, but again, I never got a chance to work with the primary lender.

Re: SHORT-SALE IMPASSE - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 30, 2006 at 13:45:03:

Maybe I would have been more successful over the years, if I knew about sending a check with the short-sale package. Although my s-s packages are thorough, comprehensive, reader-friendly with numbered pages and table of contents, etc., I’ve never sent a check along with it.

Since a good percentage of my deals depend on my financing coming from my buyer at the double-closing, it would be impossible for me to include a check large enough to cover the actual purchase. That is certainly the case with this property.

As far as the smaller properties go, when I do have enough funding to include a check, how does that work, as far as arranging a closing? What if the lender just sits there with my check, and I have an uncashed check out on the street? Does the lender get a deadline, after which the check is stopped? What about making multiple offers at a time? You must be in a bigger league, or I missed an early lesson that I should have paid more attention to. Thanks for any enlightenment you can provide.

Re: SHORT-SALE IMPASSE - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 29, 2006 at 21:52:42:

There was no check. The short-sale package was submitted to both the first and second with a contract and settlement sheet.

Re: Get used to it. - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 29, 2006 at 22:09:57:

The first is the one who filed the foreclosure. I sent a comprehensive short-sale package, with a copy to the second lender. Aside from all the financials the lender wanted, were the contract, HUD-1, title search, repair schedule, pictures, etc.

The first was matter-of-fact with me, asking if the second is aware that they’re in no position to be difficult, that they’ll get wiped out at auction. The second’s rep said, yes, they know that.

The first is for $360K, the second for $120K. The property appraisal by the first lender just came back at $360K. My contract offer was for $300K, figuring $285K for the first and $15K for the second. The first gave me a verbal, plus a fax saying $330K. I offered the second $12K as a start. They wouldn’t counter, insisting they see a commitment letter from the first. So even if I raised the stakes to meet the first’s counter of $330, they won’t accept it until I have a commitment letter from the second.

I’ve asked both lenders to confer within their departments to come up with an idea to get us past this roadblock. I’ve never had this happen before. Are you saying that it’s the rule, and not the exception?

Re: SHORT-SALE IMPASSE - Posted by Joe Kaiser

Posted by Joe Kaiser on March 31, 2006 at 03:51:32:

I never suggested sending a check with your package . . . it’s more of an
"instead of" thing.

Joe

Re: SHORT-SALE IMPASSE - Posted by bill

Posted by bill on March 30, 2006 at 06:56:00:

i live in illinois and have a similar situation. both lenders told me they can’t do anything to wait for the auction. the owner told me the same. he is filing bankruptcy and couldn’t care less about a foreclosure. this guy owes 43 on the first and 26 on the second and house is worth qbout 50.

Re: SHORT-SALE IMPASSE - Posted by Joe Kaiser

Posted by Joe Kaiser on March 29, 2006 at 23:08:40:

I’d have skipped the short sale package entirely and just sent the check.
Can you see why?

Joe

Re: Get used to it. - Posted by Joe Kaiser

Posted by Joe Kaiser on March 29, 2006 at 23:14:41:

Had I read this post first, I’d have skipped my other post. Is there a deal
here? If so, where?

Re: Get used to it. - Posted by The Frisco Kid

Posted by The Frisco Kid on March 29, 2006 at 23:50:41:

Jerry

I agree with Joe on this, where is the deal? My impression is the second is hoping you will get a good enough deal with the first so they can step in and offer the same and salvage something for themselves, meanwhile if that were to happen you wouldn’t even recieve a thank you note.

Re: Get used to it. - Posted by Jerry in Illinois

Posted by Jerry in Illinois on March 30, 2006 at 13:22:43:

As far as “Where is the deal?” goes, the property, as is, is worth approximately the total of what was mortgaged, or $480K. My profit would be equal to the discount I can get from the lenders. That’s why I’m working so hard to get this done. Am I missing something obvious here?

Re: Get used to it. - Posted by Joe Kaiser

Posted by Joe Kaiser on March 30, 2006 at 18:03:53:

Yeah, you said the appraisal came in at $360k.

Joe