Listing a Short Sale

Foreclosures, Short Sales, Tax Foreclosures
1

I’m planning on retailing a short sale that is just about approved.
I getting it for $121k.
FMV on tax assessment = $165k (appraised at $192)
This is a pretty house with no repairs.
I’m going to do a open house next weekend to try and find a retail buyer & I’m thinking of listing to gain more exposure to retail buyers.
Does anyone use this strategy? Also, if I get an offer, do I put the owner(seller) as my LLC?

2

I list short sales but typically I only do it to make the 6% commission and move on to the next deal. This one has a lot of equity, so you might be able to sell it FSBO fairly easy. Listing will never hurt exposure, though, and typically the 3% you give up will probably be a wash anyway since you will most likely get a higher price listing on the MLS.

Chase

3

Many lenders require title seasoning before they will lend money to your new buyer. Some like to see 3-6 months. You may want to find a realtor who does financing who will help your buyers find lenders which does not need this type of seasoning.

I usually give 3% to selling agent and also allow $1000 bonus to person who bring offers within 30 days of listing and singed. Some agent search where they make more money and take their clients to that property first.

Good luck.
DFW

4

Chase - Great point about the commission being a wash. But I would like to FSBO 1st and sell fast through the open house. If no success, then I will probably list.

But I have a few questions about the listing…
Can I list the property (prior to the double closing) when the homeowner still owns the property and the short sale is in the final stages of negotiations?
-And if I can list, do I put my LLC as the seller on the purchase contract?

The other issue bought up by DFW is the title seasoning requirement. Is seasoning even an issue when I would be doing a double closing? Or is this dependent on my attorney(who is also my closing agent) being able to overlook this?

5

First of all, you just said it wasn’t approved yet. So you really only have a wish that it will get approved right? You have no equity at this time. Anyone that assumes you do is grasping at straws. Why don’t you wait until the deal is actually approved before posting? And getting everyone salivating?

First of all I really doubt you will get it at 121K. (73% of your fmv) A house in good condition with no repairs? Don’t want to burst your bubble but is this the first ss you’ve tried? Just because they haven’t told you no right off the bat don’t assume you will get it for that. They love to procrastinate. They would rather take the property back and sell will a realtor for full fmv. Even a 2nd would rather let it go and then sue the owner for a deficiency judgement. Go figure. But that’s reality.

The reasoning is they want to sell to someone paying fmv for the property. A short sale is only considered when MORE money is owed than fmv. The only way this could happen to your benefit is if the BPO is much lower that fmv.

EH

6

Actually EH, I have this property approved at $125k, but I countered again for the $121 and I’m awaiting approval.

-And thanks for teaching me how short sales work, but in the future, don’t post a reply to a post if you have nothing to say about what was asked.
I proposed a question about a retail exit strategy for a short sale. I did not ask someone to offer negative commentary or evaluate a deal they know nothing about…

7

Thanks for the tip. I’ll make a note of it. Oh, by the way, 99% of lenders don’t lend when there is a break in the chain of title or thru an assignment like you are talking about, but you knew that right? So I wouldn’t want to educate you.

EH

8

Can you get the owner to sign a promissory note and record it on title for the difference

9
  1. yes you can advertise the place because you tied up the property with a purchase contract.
  2. If you put your LLC as the buyer under the purchase contract, then you must put the LLC as the seller in your new purchase contract.
  3. Title seasoning is an issue. If your new buyer is a retail buyer, you might have to point him to lenders that don’t require title seasoning.
  4. As for listing the place, find a broker who is willing to put a lockbox on the property and put your listing on the MLS for a flat fee of like $400, then offer the buyer’s agent like 4% and state that you will pay all closing cost. I sell homes in as little as two weeks in this downward market in Southern California.

Regards