A little short sale help....

Hey there,

I’m just starting out with my investing buisness, I found a great short sale home, with a good ARV. I want to use a hard money lender for my funding and have a good lender on my team. Will banks except offers or work with you if you are using a hard money lender to fund the deal?

Thanks for any help, reading all the posts on these forums has really helped me already!

  • Kristen

All you need to do is give about $1000 EM to the Realtor to start the short sale. The bank could care less where the funds come. Make sure your lender is ready to fund as soon as the bank accept your offer.

In my farm, our MLS is populated with ‘backup’ short sales which have been going on for months. Even the short sales with a ‘firm’ trustee sale date aren’t really viable, as such dates are subject to ‘postponement’, which has happened in a number of my offers, to the extent that I have now eliminated short sales from the process until I can find an inside track to bank finance officers who can make direct decisions. Otherwise, it’s throwing a ton of darts at a dartboard and hoping one will stick. As a cash buyer, that’s a waste of my money and time. Trustee sales and REO’s have proven to be a better, though not perfect by any means, bet.

My advice: Put some strong time limit terms in the short sale addendum and leave contingencies to walk away from the deal and tie up a bunch of deals. Maybe one of them will stick. Also, consider the ramifications of re-upping your pre-qual/DU findings. We expired those a few times back when 6-12 month execution times were common. Check into that aspect to see how it works now. Back then, a tri-merge would hit the FICO each time, knocking it down some due to the hard inquiry. Perhaps that has changed.

Short sales will, in my farm, always look like a great deal. They’re marketed that way, to attract traffic and offers. It’s all virtual, with no real connection to true market value. When you run across an ‘approved’ short sale, then you’re starting to see something closer to reality, and the price reflects it. I haven’t yet met an ‘approved’ short sale I could bang hard numbers on. They’re priced for retail buyers. Make an offer under the ‘approved’ price, and it’s back into the nebulous, unless one has a hard line to the decision-maker at the lending institution. That’s been my experience anyway. Good luck.

Hard money lenders typically have much higher interest rates than banks because they fund deals that do not conform to bank standards.

I could never understand why investors don’t like to put up earnest money to submit a bid.

I agree…how can you be “Earnest” with no investment.

Perhaps “Earnest” is you first name?

Also, short sales, IMO, are anything but SHORT.

Lenders can take forever…had one, worked on it for over 90 days…bank never accepted or denied it…went to forclosure and I bought it there…for less than the short sale offer price.

Bill H

Most investors will low ball on short sales and the bank just laugh and never respond.

I realize and understand that. However: I did not low-ball them…made honest good offer.

NO response for over 90 days.

It went to foreclosure…

I bouht it for about half of what I had offered.

Explain that?

Listing agent didn’t know what they are doing. If the discount bid is lower than the offer price in the short sale, the listing agent was a moron. Simple as that.


Nothing surprises me anymore in everything I’ve uncovered going thru this crisis. That’s just the tip of the iceberg when it comes to dealing with them and what they get by with. Some people call it Robo Signing, I call it MANUFACTURED FRAUD! That hurts anyone that tries to deal with them.

Unless, you wait it out like you did! So WTG good job on your investment! :cool