If I am going to short-sale someone’s property and buy it myself is a listing agreement necessary?
I see all the packages require a listing agreement but I don’t see the point if I am going to buy it why would it have to be listed?
There is no need for a listing agreement. As long as you are buying it before it goes to auction, you just need a purchase agreement.
When it states one of the requirements as being a listing agreement what do you do then?
Do you write about it in the hardship letter why its missing or do you just not mention anything and don’t submit it?
Even if there is a buyer already in place, you or otherwise, the lenders generally still want to see a listing agreement. The loss mitigation representatives job is to collect as much of the debt as possible. In my experience they want to see an effort being put forth to sell the property for as much as possible. They may suspect that it may bring a higher dollar amount if they put it on the market. It’s the mentality of, “you never know until you try”.
To better your chances in a short sale I suggest listing the property and show all offers that are come in lower than yours and don’t show the offers that are higher.
How do you suggest finding a realtor or broker who would be willing to list the short-sales, knowing that they shouldn’t accept any offers and will be pulling it fairly soon?
The problem you’re going to run into is that the banks are in it for the best interests of their shareholders and some of them have rules that say the property has to be on the market for at least 60 days before they will consider a short sale. They also have to be a couple of months behind on their mortgage. Then it gets tricky because while the bank may be deciding on the short sale, the foreclosure department may be ready to yank the house. Heard one story where the short sale was set to close on Friday and the foreclosure department took the house on Tuesday. Those two departments just don’t seem to talk. Hell it’s even hard finding the same person twice in the same department when doing a short sale.
Try to find a brokers/agent that is on your side. Do not trust brokers/agents to only sumbit your offer to the bank. By law they are required to submit ALL offers if the lenders request they do so.
Tell the lender that the home is FSBO, and has been for a while. This has worked for me with many lenders. Sell in your hardship letter how the value is much less than what is owed. This may not work since the lenders are still asking way above most MAO formulas. Be prepared to move along if the numbers do not work for you.
It is definitely in your best interest to find a real estate agent who is on your side. Not only to submit your offers on REO property or to show a listing agreement to the bank for a short sale, but also for expired listings. These days properties are sitting on the market for a really long time and it is easier to buy below market properties once their listing expires a few times.
Our company has been doing short sales for about five years and we always have a listing agreement in the package. It makes the loss mitigation department happy. Luckily one of the partners is a RE broker so it is not a problem for us. If you are going to be an active investor and do short sales I strongly recommend that you get a Realtor as part of your Dream Team. They can be very useful for many things such as comps, selling your property, bringing you deals, etc.
Personally, I do not allow the Realtor to do any part of the short sale negotiations. To many hands in the pot… Well, it can cause problems.
To find a Realtor/Broker to work with, network. You will probably talk to several before you find someone who you can work with.
As long as you maintain your position as the direct contact with the lenders, and not the Realtor, it doesn’t matter what offers they get. The Realtor will give them all to you, and you pick and choose with ones to forward to the lenders.
As far as finding a Realtor / Broker to work with, start asking around. Realtors are a dime a dozen, so it shouldn’t be hard to find one that you want to work with and who in turn is willing to work with you. If you don’t know much about the Real Estate industry, I suggest looking for a more seasoned individual. Also, the less work you require from the Realtor the more willing they are to work with you in this kind of relationship.
Good Luck ~ :beer
Where are you located John?
i am in nj