First Attempt At A Short Sale
Hello,
I'm attempting my first short sale. I have the deed and the title has been checked. They have a 1st at 63K and a 2nd (equity line) at 19K. They are 5 months behind. The FMV is around 95K after repairs and I'm guessing it needs about 5-10K to fix up (carpet, paint, lawn, some new doors, tile, cabinets).
The first has just turned the mortgage over to the lawyers. Some of the information I have studied indicates the 2nd will take almost any offer. The property is also listed with an agent and has a flat fee of $2500 or $250 is they cancel.
Who should I approach first? The 1st, 2nd, or cancel the real estate agent? If I made an offer to the 2nd, what would be appropriate?
It has been next to impossible getting a contact with the first. Their recorded message indicates that I need to contact the attorney.
The property is in a great area and will be easy to lease/option which is my current exit plan. However, if I can't get the banks to work with me, I'm thinking I should pass.
The owner really doesn't care one way or the other, he is completely fried.
Please let me know what your thoughts are and THANKS for the help and advice.
Ron
Quote:
On 2004-01-21 23:54, ronsmith wrote:
Hello,
I'm attempting my first short sale. I have the deed and the title has been checked. They have a 1st at 63K and a 2nd (equity line) at 19K. They are 5 months behind. The FMV is around 95K after repairs and I'm guessing it needs about 5-10K to fix up (carpet, paint, lawn, some new doors, tile, cabinets).
The first has just turned the mortgage over to the lawyers. Some of the information I have studied indicates the 2nd will take almost any offer. The property is also listed with an agent and has a flat fee of $2500 or $250 is they cancel.
Who should I approach first? The 1st, 2nd, or cancel the real estate agent? If I made an offer to the 2nd, what would be appropriate?
It has been next to impossible getting a contact with the first. Their recorded message indicates that I need to contact the attorney.
The property is in a great area and will be easy to lease/option which is my current exit plan. However, if I can't get the banks to work with me, I'm thinking I should pass.
The owner really doesn't care one way or the other, he is completely fried.
Please let me know what your thoughts are and THANKS for the help and advice.
Ron
Contact the RE agent first. Ask them if they will release their listing agreement since the property is in foreclosure and its putting the seller in a bind if they wont let the seller out. If the RE agent wont do it, ask to talk to the RE agents broker.
Next go ahead and contact the 2nd lienholder. Ask them if they will accept a short payoff. If they will, they will send you the info that you need to have the seller fill out. Depending on who the lender is, you may or may not have a hard time with them. They like to be difficult at times and they really like to try and dissuade investors. Be persistant but not overwhelming. Get them to send you the packet that you will need. After you tackle the 2nd, you can go ahead and try the 1st. Depending on your case you may be able to beat up the 1st. Alot of times the 1st does not want to bend if they know the 2nd is getting any more than $1000.
let me know how it goes.
pcglobal
Thank you so much for the quick reply and advice.
If your purpose is to lease purchase the house then I would first get the realtor to drop the listing. Then I would contact the second mortgage holder and try a short sale. Since the 1st is in the process of foreclosing, you should be able to get the second down almost next to nothing.
Once you and the second have come to a feasible agreement, make sure you get it in writing which is usually the 'Pay off'. Get the reinstatement amount from the 1st mortgage. If its only 5 months behind, you can either try to do a forbearance agreement or put the house on the market for lease purchase and use the down payment from your tenant buyer to bring the loan current, or www.both.This way you get it out of foreclosure, discount the second for pennies on the dollar, thus creating instant equity for you when its time to cash out, while creating a profitable lease purchase deal just from what you know, not by how much money you have in your bank account.