A promising situation, but what to do next?
This is our first attempt at a short sale deal, and it looks very promising!
We're here in Colorado (actually quite close to Dwan and Bill) and have just had a couple in trouble quitclaim their house to us in an attemt to save it from going into foreclosure.
Their first is $125K, and the second is $75K. They think the house is worth $240, we think maybe $200-210. We want to shortsale the second (only) and are thinking of offering $23K. We would like to flip to a bargain hunter for about $180K. We don't want to put up any money, and are trying to understand the mechanics of a "simultaneous closing," hopefully never actually owning the house. (We haven't filed the QC deed.) Does this all sound workable?
The second -holder Loss-Mit folks seem quite motivated and have asked us a couple of times to submit a proposal.
Trouble is, we really don't know what to send them. (We met Dwan and Sharon at a Wright Thurston event in Denver recently, but foolishly didn't sign up for their boot camp, a mistake we hope to rectify at the next opportunity.)
Should we let them know we already have the quitclaim deed? That we are planning to flip the property? Or should we just look like interested buyers, maybe even planning to live in the house? Does it matter? Do they care?
We have taken pictures showing every unfavorable aspect of the property, and have gotten a "hardship letter" from the sellers. (By the way, they are in bankruptcy... does that matter?) We are planning to include these things with our proposal. Any tips as to what else we need to send?
Wow, this got much longer than I intended, but we are just now finding out how much we don't know about this.
Thanks for your attention. Any suggestions will be very much appreciated.
adastran
"Wow, this got much longer than I intended, but we are just now finding out how much we don't know about this."
You might have a chance at working a modest short with the second, but the bankruptcy (chapter?) may exact an adverse impact upon that possibility.
What did the Homeowner provide to the bankruptcy trustee to confirm the property value? An appraisal? A BPO? A guess?
I don't know what information was provided to the trustee, but our lawyer says that the property has been "abandonded" (by stipulation) by the BK judge, so the lawyer says the BK shouldn't be a factor.
We did submit a proposal, we didn't include the fact that we already hold the QCD.
Comments?
Many mortgagee short sale approvals are voidable if the mortgagor has conveyed title to a third party. I would certainly NOT mention to the mortgagee that you hold a QCD, and if it's been recorded, that can further complicate the matter.
Also make sure that the Asset (House) was released from the BK prior to your QCD - otherwise the one you've got isn't valid & you'll need to get another.
Thank you both.
The property was released prior to the QCD, and we have not filed it. In fact, I don't know when (or if) it comes into play, but we are supposed to be receiving an offer today! Of course we haven't heard back from our SS proposal to the 2nd holder, so we won't even know if we can accept it. Events certainly seem to be piling up on one another. Someday we will know what we are doing, but right now we are just trying to figure it out as we go along.
adastran