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.
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
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
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
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.
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.
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.
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.