What to do first short sale - Posted by GT

Posted by chris-atl on October 19, 2003 at 14:16:37:

This is a package you put together for the bank. It includes the sales contract between you and the seller, a net sheet showing what the bank will net if they accept your short request (an attorney can prepare this for you), comps that BACK UP your request (if none do, don’t include any, but your chances go down), photos (also IF they back your request), and a hardship letter from the seller saying why they got into the situation they did and why they can’t pay the loan any more.

What to do first short sale - Posted by GT

Posted by GT on October 19, 2003 at 09:46:28:

First, this site and CRE radio are the best, Thank You,.
Second, I have a posible deal to short sale, the owners are willing to sign just about any thing to get out of there house. The FMV $145,000 they owe probably that much.
The house needs a little work, so does the yard. What do I have them sign first before I try to talk to the lender, to get a discount. Sharon and Dwan put a $10.00 dep. on the house to hold it but what do you put for sales price on the contract.Thanks again

Re: What to do first short sale - Posted by GT

Posted by GT on October 21, 2003 at 18:51:08:

I really appreciate the help

Re: First short sale and bankruptcy - Posted by Jesse

Posted by Jesse on October 20, 2003 at 16:05:56:

Hello short sale experts,
I am also going through my first short sale and have been told by the bank the list of details needed for me to submit the offer. The one unique twist is the seller is in bankruptcy (chapter 13). The seller is willing to sign the contract to give the property away. However, it appears in order to submit the offer I need to submit it to the bankruptcy attorney representing the seller and they then can file a motion to release the property from bankruptcy with the intent to sell. However, what happens if the property gets released but the bank doesn’t accept the short sale. I haven’t had luck in discovering who to negotiate with at the bank prior to petitioning for a release of bankruptcy. Any input would be appreciated.
thanks, jesse

Re: First short sale and bankruptcy - Posted by Jesse

Posted by Jesse on October 20, 2003 at 15:46:23:

Hello short sale experts,
I am also going through my first short sale and have been told by the bank the list of details needed for me to submit the offer. The one unique twist is the seller is in bankruptcy (chapter 13). The seller is willing to sign the contract to give the property away. However, it appears in order to submit the offer I need to submit it to the bankruptcy attorney representing the seller and they then can file a motion to release the property from bankruptcy with the intent to sell. However, what happens if the property gets released but the bank doesn’t accept the short sale. I haven’t had luck in discovering who to negotiate with at the bank prior to petitioning for a release of bankruptcy. Any input would be appreciated.
thanks, jesse

Re: What to do first short sale - Posted by MattFL

Posted by MattFL on October 19, 2003 at 22:34:48:

What type of loan is it? If it is an FHA loan, don’t even think of offering 40% of the loan. The lender will only discount the loan 82% of what the broker they send out to look at the house thinks it’s worth. Even if it is not an FHA loan, your offer needs to be more precise and justified than just some random low %. Figure out what you think the BPO will come out to based on what shape the property is in. You need to get a high repair estimate to send in, low comps, and the best worst pictures you can get. What the lender is going to discount to also depends on what type of market you are in, hot or slow, who the lender is, what they feel they can get at the auction or what they feel they can resell the house for if they take it back, and a host of other intangibles that you won’t be able to know about. Figure out all the things you can and make an educated and justified offer. Once you do a few you’ll figure out what you’re going to get away with.

-MattFL

Re: What to do first short sale - Posted by chris-atl

Posted by chris-atl on October 19, 2003 at 12:21:56:

Hi GT,

The sales price on the contract will be the amount that you hope to short the mortgage to. This will be the absolute highest amount you are willing to pay. If you end up shorting lower than that, just fill out a new contract. The owner isn’t getting any more or less money either way. So if the FMV is $145,000, depending on exactly how much work needs to be done, I’d start at 40% of that, or $58,000. You can work your way up from there with the bank. Have the seller sign a Authorization to Release Loan Information. Then get together your package of sales contract, hardship letter, comps that show that the house is worth much less than $145k, photos, and net sheet. Then approach the bank.

Re: What to do first short sale - Posted by rm

Posted by rm on October 19, 2003 at 15:42:47:

>

Is that how you do it?

I always write mine with a little room to the upside.

What % do you get approved?

Re: Fully supported? - Posted by TheShortSalePro

Posted by TheShortSalePro on October 19, 2003 at 14:04:08:

If you want the mortgagee to take your Proposal seriously, do your homework. You shouldn’t make an offer that isn’t fully supported by market and repairs estimate data. If you can’t support your offer, it’s unlikely that it will survive a cursory review.

The contractual sales price should be the most you are willing to pay for the property, irrespective of what is owed.

Re: What to do first short sale - Posted by E.Eka

Posted by E.Eka on October 19, 2003 at 13:52:10:

Where could one get a short sale package? in order to know what goes in a short sale package before I approach the bank.

Re: What to do first short sale - Posted by MattFL

Posted by MattFL on October 19, 2003 at 22:21:48:

Each lender has its’ own requirements for a short sale. Ask the lender to fax you a short sale packet, which will basically be one page explaining everything they want and a few pages or so of their own worksheets to fill out.