Short Sale, then resell/ Need hep - Posted by James (FL)
Posted by James (FL) on July 14, 2003 at 18:40:22:
I received a call from a lady today. She actually called to try to refinance but I could not help. She is in foreclosure, and does not have enough equity for me to help. However, there is some equity. The home FMV is approx $115K. She owes $95K including arrears. ($88 pricincipal, $7 arrears).
I asked her if she would consider selling her home to do nothing more than save her credit and avoid foreclosure. She said she had already considered that. She told me she spoke to someone last month, who said they would purchase her home for $70K using a short sale, bank willing. She did not know what this meant, and he did not explain it to her. She thought she would be responsible for the additional $25K on her own. She turned him down. I proposed the same thing to her today, but explained to her that the bank would consider the foreclosure satisfied, she would not owe them anymore money, and the two catches were, she could not receive any money from the sale, and the bank would have to agree to let it go for 70K. I explained to her the only way to do this, would be if the home is in need of repairs. She said the Central AIR went up last month, and she got an estimate of $3000 to fix. She also said that the house needs to be repainted inside and out, and the bedrooms are in need of new carpet. The rest of the home is tile. She said everything else is in good shape.
My thoughts… Home is in need of approx $7K in repairs. She is willing to sign over the deed and allow me to negotiate with the bank. Will it be possible to get the bank to agree to $70K and how do I go about it. I have never done a short sale before. I read the posts last night on the Short sale fad. I laughed, but now had one land in my lap today.
My thoughts to resell the home are either seller financing, or sell for $115K, hold a 20% private second so anyone can get approved (from my company of course) and then sell the private note for 70% of face value. This should bring approx $20K profit including holding costs, rehab costs, closing costs, etc.
Does this seem feasible, and if so, what steps do I need to take in order to make this happen?
Any help would be appreciated.