First Short Sale Help
HI,
Im working on my first potential short sale and Im a little confused as to how the closing works.... I have heard of investors getting the acceptance letter from the bank and having only 35 days to close, but Ive also heard of some having up to 90 days to bring the financing to the table.
1. what have you guys experienced?
I have also heard that some get the deed from the seller and record it in the name of a trust and have the seller as a beneficiary, ( I think ),
I have the comps, the hardship letter, the sellers paystubs, and mortgage info. He is willing to deed me the house and just get it off his hands but I need some guidance.
2. Do I get the deed recorder before I put the package together for the bank or no?
I think I just need some info on how the closing works...
Can you assign the contract to your buyer you find or do you have to close on the agreement b/w you and the bank, and then have a seperate closing for you and your new buyer?
Thanks for your response... I have read many many posts for hours on this site and have gained a great deal of info from it. When your new though, its sometimes difficult to distinguish b/w the best way to do things, and the nonsense, so thats when I post a question for clarification bc I know there are several ways to close the deals. I guess Im just trying to gain an understanding of how the majority of you do the deals...
. Please correct me if Im wrong but from what Ive read,,,,
I should set up a trust in the "sellers name trust" with the seller as benef, my LLC as trustee, and an assignment of that interest to me. ( this will help any buyer I find thats getting a mrtge bc no chain of title is broken )
My questions are mostly regarding the timeframes for which to do certain steps.. Do I put my name or my LLC name on the purch contract ? or doesnt it matter?
Do I just record the trust and not record the assigmnt of ben int to me?
Is the lender still going to deal with you if the prop has been put into a trust while its in default?
sspro.. thats exactly what Im trying to do. That is why I am asking the questions bc I am confused.. I have read a ton of these posts, and Im still trying to differentiate the different aquisition and selling types. I understand you like to short the prop. then rehab and sell... How do you structure the close when you dont want to bring your own money to the table, and you want your buyers $ to payoff your sellers defaulted loan, and there is not a whole bunch of work that needs done... I just need some clarification as how you all do it when you use a trust,,,
1. who signs the purch agrmnt? Can it be the same LLC as the one that is the trustee of the trust you set up or does it have to be a seperate LLC?
2. When you have the property in the trust, does the bank your negotiating with know that it is in the trust. This is where Im confused.. when do you put the prop into the trust,,, before, during, or after the bank accepts your offer?
Any advice would be greatly appreciate
Again, I am trying to lay the proper foundation like Ive seen you recomend many times... I thought that you deed the property to the trust , correct? ( not sure where snatching the deed came from ) I would like to try and do 1 or 2 deals with out question, but if I dont know the proper steps then how do I get to that point.. I am clearly confusing several techniques and was hoping for some clarification.. My thought was post some questions I had on the forum before I am into a deal where Ive made the wrong moves.. Any help or assistance to some of my questions would be great.
Many people fail because they want everything perfect before they do their first deal. Do your first deal, and then try to improve on the next one. You are trying to accomplish advanced techniques on your first short sell. For your first SS, just buy the property in your name. Keep is simple. Get hard money to fix it up, and then resell it. Can you get a hard money loan?
What are your numbers?
1) ASIS value
2) Have you done a preliminary title search
3) What is the payoff of each lien and judgement
4) How much repair is needed
5) What is the after repair value
Brenda
point taken... I just see how some get in too deep on their first and Im trying to avoid any mistakes..
fmv 110k
bal 111k
comps come in around 85k bc no recent sales in area in last yr
going to put in offer for 70k
needs less than 3k work
have estimates showing 10k for roof and other small things, but have a friend who will do roof and other small items for around 3k
im working with a realtor that has done some shortsales in the past but is not familiar with these advanced techniques. ( the trusts and so forth ) I have my credit tied up on some rehabs currently so I would have to do hard money... bygrosssnickle do you have a hard money source if I need to use one.?
oops sorry for butchering your name
We did not use the same terminology, so I am guessing that ...
1) ASIS value - 85k
2) Have you done a preliminary title search - No
3) What is the payoff of each lien and judgement - not sure. Maybe 111k on the first.
4) How much repair is needed - 3k to 10k
5) What is the after repair value - 110k
Here is my advice. Get the deed but do not record it. Contact the lender and ask for the Loss Mitigation Dept and ask them to fax you a SS package. You are a friend of the owner. You will have to fax an authorization first. See what is in the SS package. You will probably have to list the house, but maybe not.
Post back after you see the SS package.
Brenda
crime report, good idea i hadnt thought of that. i thought the scenerio witht the appraiser wouldve been enough.
i asked his supervisor if this guy "Charles" had the authority to not turn in offers and he said YES he does. i thought that was strange myself.
Yeah, worked with Centex recently, the first LM was really a pain... told me that I needed $7.5K to reinstate, and the funds needed to be in the office the next day. I waited a few months, called again, and same scenerio, but higher requirement to reinstate. I told them the homeowner had $4k, so that is all that they could get... He said well, then it is going to sale.
Then I received a call from another LM ( two hours after that,) she said the case was reassigned, and she was handling it. She said, if the $4k was in the office by the end of the month, they would reinstate, putting the late fees and the other 5 months of payments to the back of the loan (recasting.) And therefore that is what I did. I have a house for $4k, and working a deal to get $30K profit.
Now, you are asking for a SS, I asked for a reinstatement (good neighborhood, half-way decent shape, no structural defects.) But what I am trying to convey is maybe you need to wait a few months, and call back again. Send them your SS packet, and call again. Maybe they will change their minds, maybe they wont.
You are intentially buying in a rough neighborhood? Do you have a buyer lined up to take it? I would never risk that, just because I have had houses I "GAVE" away, just to get rid of them in rough neighborhoods... Lesson learned.[ Edited by joel on Date 07/16/2005 ]
interesting. yes i am well aware of the neighborhood and have bought in ruff areas before. in my market anything will sell for the right price. its not really a ruff neigborhood its actually a very rural and nice area. its just one single street that has a number of multi fams on it (the only multi fams in that town) which leads to low income renters inhabbiting it. all the other streets in the neighborhood have beautifully maintained houses. theres nothing wrong with bad neighborhoods if you can buy the house at a steep discount. i actually bought a house last year at a 50% discount because a murder had happened on the property, i turned around and sold it at a very reasonable price within 2 weeks.
i have really used every tactick i know, and these guys just arent willing to budge. i even called the guys superior and he said no-way. these guys were really intent on not taking any less then the appraisel amount (which is what they believe it will sell for at sale) they also said they wouldnt order a new appraisel and wouldnt allow me to get one.
with the house going to sale within a month i just told the owners to either try and come up with the cash to bring it current or try selling it before the sale. i will watch it and see what happens.
Quote:
On 2005-07-16 11:03, SynergyProperties wrote:
Yeah, worked with Centex recently, the first LM was really a pain... told me that I needed $7.5K to reinstate, and the funds needed to be in the office the next day. I waited a few months, called again, and same scenerio, but higher requirement to reinstate. I told them the homeowner had $4k, so that is all that they could get... He said well, then it is going to sale.
Then I received a call from another LM ( two hours after that,) she said the case was reassigned, and she was handling it. She said, if the $4k was in the office by the end of the month, they would reinstate, putting the late fees and the other 5 months of payments to the back of the loan (recasting.) And therefore that is what I did. I have a house for $4k, and working a deal to get $30K profit.
Now, you are asking for a SS, I asked for a reinstatement (good neighborhood, half-way decent shape, no structural defects.) But what I am trying to convey is maybe you need to wait a few months, and call back again. Send them your SS packet, and call again. Maybe they will change their minds, maybe they wont.
You are intentially buying in a rough neighborhood? Do you have a buyer lined up to take it? I would never risk that, just because I have had houses I "GAVE" away, just to get rid of them in rough neighborhoods... Lesson learned.
<font size=-1>[ Edited by joel on Date 07/16/2005 ]</font>
You have to give the bank a reason to short-sale. Many times the reasons might not be the actual property itself, e.g. structural or cosmetic. What is the area like? Are home sales slow? Are there other brand new homes in the area close to the same price as what is owed on this used home?
Depending on the appreciation in your area, this could be a perfect "subject-to"; especially if the owner just wants to walk away.
What ever you do DO NOT LEASE BACK THE PROPERTY TO THE HOMEOWNERS!!!
Juan Restrepo
Your agent is correct. There is no mortgage note on the property, so HUD can not negotiate a discounted payoff -- no short sale possible. As far as discounting for surprises, you can always submit a bid that HUD might accept.
It has been awhile since I purchased a HUD foreclosure, but HUD has always paid HOA fees that accrued while they held title -- even special assessments.
Is there a real HOA lien against the property, or is the HOA just giving the settlement attorney a statement showing all the past due fees to include those from the defaulted owner?
If there is a real lien filed at the courthouse, the real question to ask here is why the HOA lien was not extinguished by the foreclosure. HOA fees that were assessed after HUD took title should be paid by HUD from the proceeds of the sale, but those that applied prior to the foreclosure should have gone away.
Perhaps your settlement attorney can help you wade through this. I would make another offer, if HUD will allow you to bid again, and have your attorney address the status of the lien. Perhaps a quiet title action against the HOA will be required.