Hi - I have read a book about SSs, and have read a lot of info. on this site, but still have a few gaps in my understanding of SSs. I am hoping that some of you more experienced folks can help me out in understanding this.
When work with a lender on a ss, when do they share the BPO with you?
I am assuming that I will get this after I have already signed a contract with the HO. Can I then go back and ammend the sales contract w. the homeowner based on this info., or do I have to stick with the original amount? Will the home owner know what the BPO is? How exactly does the BPO relate to the price I have agreed on with the HO and how do I get them to coincide?
What if the short sale doesn’t go through, and I have a contract with the HO. Do I put a contigency in the contract stating that the contract is contingent on the ss.
Get a Borrowers Auth from HO to feel out the lenders and get their requirements for SS package and payoff. Explain process to HO. Inform them of tax consequences, etc.
Sign a Purchase Agreement with HO- contingent on SS being approved. Some people leave the price blank if the HO agrees since it is still to be determined. I fill it in with my opening offer. You can use a standard PA or have am attorney write you one for SS.
Submit complete SS package to Lender.
Lender orders BPO. I read people saying sometimes that they are told what the BPO comes in at. In my personal experience, this almost never happens. Sometimes the broker or loss mit will hint at the range of the number but I was always under the impression they could not tell you outright. Telling you takes away some of their negotiating advantage I think. I wouldn’t count on them telling you what the BPO value is.
Based on BPO, lender wither accepts, counters or rejects your offer and you negotiate from there.
At the end of negotiation, you tell the HO what the result is then finalize PA and schedule closing if approved, or move on if rejected.
BTW, there are other ways some people suggest in terms of getting the deed and using land trusts, etc. I don’t do that stuff.