I Think I Have A Deal, Now What To Do??
This would be my first attempt at a short sale, so please bear with me.
Appraised price 115,000.00
Ist Mortgage balance 96,000.00
2nd mortgage none
PITI 1,046.00
Behind one payment, another due 10/01/03
Single parent can't keep up on payment, wants to move on.
Mortgage holder, Washington Mutual
Many thanks,
Jodyb
Why don't you just buy the property "subject to". You can make up the 2 back pmts and there is still 17k in equity. Sounds like a good deal to me. If there are major repairs or other problems then a short sale may be in order.
Buying subto is a possibility. However the market rent is around 850.00 -900.00 monthly and therefore any L/O arrangement might come up a little short on monthly cash flow. The bank has raised the owners escrow payment due do an error made in calculating it when the loan was set up, inflating the monthly payment.
The owner is ready to walk, so I am thinking short sale plus possible subject to deal.
I'm not real sure how to proceed with the short sale side of the deal. I would like to make a good deal a better deal.
Jodyb
When was the property appraised for $116,000? Was the appraised value in an "as-is" condition or subject to repairs?
The key would be to denigrate the lender's perception of value supported with yout own, irrefutable documentation.
Check out "How to Prequalify a Short sale Candidate" or, order A Short Sale Primer for a step by step approach.
If you order the print version that includes an hour of individualized E-Coaching, I'll help you to prequalify the short sale candidate, and structure your Proposal.
First, you need to learn what and who qualifies for a short sale. The lender will require documentation very similar to the exhibits required when the original loan was applied for. Plus a hardship letter. And a qualified purchaser who can close in 30-45 days.
There's a difference between someone who doesn't want to pay from someone who financially is incapable of paying.
Next, you need to know who has to give approval. They all have their own critera and policies. Is this a FHA?/VA?/FNMA? loan. Is there mortgage insurance on this loan? Next you need to document why the lender would/should consdier doing a short sale. It's early (a couple payments down) so the lender is not very motivated at this time and hasn't even foreclosed.
Washington Mutual is terrible to deal with. Expect long waits, and chaos when dealing with them. Expect to fax and refax exhibits. Expect a blizzard of mailings and phone calls.
I would get the deed, get the right to immediately market the property for a lease- optionee. Get option consideration which should be sufficient to cover the delinquent payments and associated fees and perhaps a little extra cash for the seller (U-Haul money) and you. The lease-optionee will not balk at paying an over market rent if you throw him a bone either with rent credit or ultimate purchase price.
these are all great replys and I have learned a lot already. This property is several miles from me, but I will be visiting there on Thursday and will inspect the property first hand. I may not be able to justify a short sale based on what has been posted as to the condition of the property.
If not then back to subto.
Thanks,
Jodyb