Bank Approved Short Sale: but what about Bob?
Let's call my seller "Bob" Because What About Bob was a cool movie.
Bob has negative equity. According to the listing agent, both the first and second are foreclosing (is this possible?) So Bob has overpriced his property on the MLS.
Bob is unwilling to budge on the price. How can I convince Bob that allowing me to do a Short Sale would benefit him? Do I tell him upfront how much he will get from the deal? I am clear on what I need to do with Loss Mitigation. But I am not certain on how much I am offering Bob.
I plan to visit Bob again tommorow. I will likely say: (not exactly like this)
Mr. Bob, did you know that you can save your credit by authorizing me to negotiate a short sale with the bank? I may be able to lower your what you owe on the property. In order for me tonegotiate a deal for you, please sign this ATR and write a letter...bankruptcy.
Mr. Bob, if I am able to lower what you owe. Will you agree to sell the house to me for the lowered price? I may even be able to give you a percentage of the sale.
Is this right? Please Help
Thanks all,
Vis
Hi Vis,
Please share the mortgage numbers with us so that we can work through this with you. What is the spread between the first and the second mortgage? Current ARV?
I would go into this with the owner and tell them anything about how much they will get, I would instead tell them how I can help them stop the foreclosure from being completed and thus help save their future credit.
Let them know that because of ______________, you think that they may qualify for what the bank calls a "Short Sale" and that with their permission, you will research it for free for them. Tell them what will happen if the bank accepts the short sale, and what happens if they do not. Make sure to remind them that this process can take a little time and it is best to begin the research with the lender right away . . . with his permission (and ATR form)
I woouldnt tell Bob that you will give him a percentage of the sale, because most banks require that the seller get NO money if they agree to short sale a mortgage. The benefit to Bob is that you may be able to get him out of this uncomfortable situation, and a small amount of dollars to help him relocate. You might offer Bob $500-$1000 to rent a moving truck or for a first months rent, to help him get a fresh start. I hope this helps!
Best of Success!
BAMZ
another Bob's Story?
http://www.housingall.com/STEPUP/SurvivMtgForecl.htm
"...Bob was lucky. He was lucky that he didn't deed his home away to a predatory, real estate scamster, as many people do."
Why does REI have such a bad reputation. The "scamster" they are referring to is an investor who would have done a short sale, no?
-Vis
Is someone taking a shot on CREI??? Hmmmmmm
Nothing wrong with short sales, in fact they are a terrific way of helping the distressed homeowner, help the foreclosing mortgagee, and benefit the Investor.
it's too bad all the home owner gets is moving money and one month's rent.
That's not all they get. They get a new lease on life. They get a chance to put a bad situation behind them, keep a fully executed foreclosure sale from further damaging their credit, and a chance to learn from their mistakes.
Maybe the Seller does get a few extra dollars to move, or for rent. Perhaps the new owner will buy from the Seller (via separate contract) some personal effects (carpets, a TV, a refrigerator) or, agree to pay the former homeowner a few thousand dollars for some work performed (via separate agreement) including debris hauling, yardwork, etc....
sound effect: light saber *swoosh*
I now see the creativity in CREI
Thanks for the insight - very-very- very helpful!
While I have you here, I would like to ask you another related question.
Have you ever had a situation where you completed the SS and the homeowners did not move out? They just kept hanging around in the house...so on. What did/would you do?
-thanks
Vis [ Edited by Visualized on Date 04/29/2003 ]
If the former homeowner remained after the closing, it was by design.
An incentive, such as $2,500 to be paid upon leaving the home in a broom swept condition... is a win/win.
However, when one purchases a home at Sheriff's Sale, for example, you might have what is known as a holdover/hostile tenant.
ShortSalePro,
Good posts.
Well, I learned a new lesson today...Here's an update on what's been going on.
Property is listed with a realtor for 345K. Sellers are in foreclosure. The 1st is 261 plus about 24K in arears. The 2nd is 38K. Realtor fees are set at 5% and closing costs are 3,000.
All for a grand total of 343,200
The property is in horrible condition. Major cosmetics need to be done. FMV is 300K max.
There are 29 days till trustee sale. Since, the description listed on the MLS said "Short Sale Approved" I tried to get an ATR from the sellers. THe listing realtor said NO! (emphasis added). Said that the bank had already agreed to a short sale with only a few grand deviation from the asking price. Here's what I said,
Well, I may be able to increase your chances of selling the overpriced property if I were to get an ATR from the sellers so that I can proceed with a negotiation with the bank.
she says:
NO, YOU DON'T NEED TO LOOK AT THE SELLER'S LOANS. THAT'S NOT OF YOUR CONCERN. YOU JUST MAKE YOUR OFFER AND I WILL PRESENT IT.
At this point, I was irratated.
Without a short sale, it looks like I can't do much with this property. If someone can see a deal here, let me know. Otherwise, I am moving on.
I really feel sorry for the sellers. If I were to be able to negotiate with the bank, I could have really helped them.
The bright side is that I learned so much from this potential deal. Now, I feel a little less nervous than before. Anyways, if anyone sees how I could profitably structure this deal, I'll buy you a beer.
[ Edited by Visualized on Date 04/30/2003 ]