? For SS Pro
I have read many of your articles and postings in this forum and have learned much from your advice and experience, so first let me say thank you for that.
I have completed 1 short sale and am in the middle of another. I have taken another course on short sales and the instructions from that was to have the seller sign 2 contracts. One for them that shows the sales price as "TBD" and that a final contract with the negotiated payoff from the lender will be signed once negotiations are complete. The other contract is blank and you use this one to submit to the lender as you make offers, just completing a new page 1 where the purchase price is listed.
I am not completely comfortable with this method, as it seems fraudulent to just "redo" page 1 of the contract.
How do you handle contracts that you submit to the lender when you make offers and counter-offers? Do you have the sellers sign a new contract every time you need to change the numbers?
Thanks again for sharing your knowledge!
The 'contract' is with the Seller... not the mortgagee... so when an offer is submitted within the Proposal... and the proposal is rejected due to salesprice... the mortgagee will tell the parties that the salesprice must be $X. It's at that time that one of two thingfs can happen. The Buyer can walk from the deal, or, the Contract can be amended/revised to reflect an increased sales price as suggested by the mortgagee.
I haven't considered using multiple sales contracts... and have found that working with one document works just fine.
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Just to make sure I am clear, what sales price do you put on the contract that you sign with the seller?
The first thing the lenders asked for in the transactions I am currently working on was a copy of the sales contract.
If they reject the initial offer, and you counter, how do you revise the contract to reflect the counter offer? Have the seller sign another contract with the revised price?
Again, thank you.
the contract sale price is the price you are willing to pay.. both you and the seller sign, consideration is paid, and the contract is submitted as part of the short sale presentation.. if the mortgagee rejects due to price, the original contract is revised, the parties initial the change, and a copy is sent to the mortgagee for additional consideration...
Usually, changes are done at the seller's kitchen table, or anywhere that is mutually convenient, and a tabletop to work on. The library... or a local Starbucks.
Contingency Clause:
Offer to Purchase Price $XXXXXX
Contingent upon lender approval of a short sale.
Any change in price, add an addendum to the original offer price.
Any other questions drop me a note.
Short Sale Realtor
On my P&S I fill in everything but the price and the dates. When I have to renegotiation the price, I make a copy, fill in the price and dates, and send it back to the lender. I explain to my clients that the price and dates are left blank and why they are left blank. I do have some special clauses that protect my client.
Brenda
Hey Y'all,
No one mentioned submitting "proof of funds" or a realtor's net sheet or HUD 1 as part of the deal.
I have found that many good short sale offers are rejected because the mortgagee had to work too hard to figure out their net distribution from the proceeds of the sale.
I am also finding more mortgagee resistance to short sales in my market (dallas). Any comments?
C- :-o
The question was about the purchase and sale contract.
I submit a preliminary HUD1 as part of my package. Mine are never hard to figure out. Mine are all cash sells, and I have in my contract that buyer will pay all closing costs, except if there is a commissions.
I also state in my cover letter the net proceeds to the bank and that it is a cash sale.
How complicated are you making your deals?
All the bank cares about is their net. I probably only have 5 line items on my entire HUD1.
Brenda
To my thinking and business model, getting a property at 80% of it's confirmed, as-is, FMV is fine... provided that you can quickly and inexpensively make repairs, improve it's curb appeal, marketability, and flip.
The real $$$ is in the equity edded applications... earned at resale. So, getting a property at 70%, 80% or even 90% of it's as-is, FMV is a foot in the door to profitability.
In my neck of the woods, there are very few properties available... and those that are on the market aren't going at their listed price...
Just read an article in today's paper about a buyer offering $500,000 more on a property listed $3,800,000... and didn't get it! And he is suing the broker because he didn't feel his offer was presented aggressively enough....The Sheriff's Sales are loaded with bidders who are looking for their first 'deal' at any price.... and muni tax lien auctions? forget about it.
As a real estate investor you gotta have real estate, right? So, the opportunity to get something at less than market value puts you ahead in the game. I wouldn't quibble at a few or even a handful of discount points... repeating the process
over a career will balance out the highs with the lows....
The thing to really worry about is catastrophic loss resulting from faulty due diligence.
That's my view.
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