Unfortunately some banks would rather see the house go the auction because they think they can get full price. They don’t realize that the house could sit in their hands for months before they’ll get any money out of it. I’ve had deals fell through because the bank was just too stubborn and they don’t care how it effects the homeowner. They’re there to make money, and it’s not emotional to them. One of the things I learned is learning from it and move on to the next deal. Keep moving forward and let it be a learning tool.
Explain to the homeowner that you are trying to save their credit and save a foreclosure from occurring. If they want money out of the home, explain that you have to make a small offer at first because they would be getting paid, the bank would be getting paid, and you’ll be getting paid. Everyone wins. That’s if the bank is willing to work with you, it really depends on who the bank is. The bigger the bank is, the harder they are to work with. Chase Manhattan and Wells Fargo are 2 of the thoughest banks I worked with in the past.
You’re talking about doing a short sale right?
I thought homeowners couldn’t get paid if your doing a short sale.
Am I wrong?
Banks don’t let houses go to auction because they think they can get full price. Banks have set operating procedures they go by. If a short sale doesn’t net them at least 82% of appraised/BPO value, then “yes” they would rather go to sale. (The 82% is not set in stone folks. There are also other factors that make up their decision). People always underestimate how much the banks actually know about the properties. Now a days, most of the larger asset companies/banks have 2 or more BPOs ordered for each asset. They are fully aware of the condition and supporting values.
Its not exactly that banks are in this to make money, but more accurately, they’re in it to cost their losses! The main goal.
And you are exactly right! It’s not emotional to them, it’s a job. They don’t care about poor old homeowner.
I don’t know lindi0637 , “the bigger the bank is the harder they are to work with”. It always boils down to 1 thing, and thats the actual deal. All these companies have set standards/rules. They ALL want to forgo foreclosure. You just have to present the right package. Also, the bigger banks are the ones pushing more pre-foreclosure sales than the smaller companies. Makes sense, they have the most to loose simply due to numbers.
And aznewbie, you are correct, a condition of the short sale will be the homeowners receive no money/proceeds, on the HUD1.
Thanks REO.
Would you mind listing what all needs to be included in a short sale package?
I know about the HUD1 and a hardship letter.
Is there an offer form that I need to use for submitting an offer?
(Thats probably a dumb question but I’m not sure about it-no deals yet)
And finally is there a form or do I just type up something stating all the repairs/costs?
Thanks for your patience! 
I’m just basing on my experiences that I had with Chase Manhattan and Wells Fargo. I didn’t have a mentor helping me on those deals and did everything on my own. Perahps if I had a mentor to help me on the side while I was constructing these deals, maybe my deals wouldn’t have flopped.
I totally understand. I just don’t feel one company is any easier to work with than another one. They actually all have the same goals in mind. I know that the larger companies are pushing pre-foreclosure sales harder than ever. Some of these even offer homeowners a bonus to participate in a SS. The deal still has to make sense to them (at least so management can approve it). I also like to point out that most LM reps get paid bonuses, and their supervisors get bonuses, and the VPs’ of LM are paid bonuses. I feel it sometimes weighs to heavily on their decisions, but it is what it is, IMO.
Here is a powerful question to ask yourself!!!
Are you a business pro or a Customer service rep??
CREATE URGENCY!! I need to talk to your manager I need this done TODAY are you the main Decision maker!! Never talk to anyone below you!!
The thing that I need to learn to do is how to negotiate. That is a problem for me because I don’t know how to negotiate properly. I know who to talk to when dealing with the bank. That isn’t my problem, my problem is negotiating.
Try this,call a lender and ask for Loss Mit dept and tell them you are new and want to help them etc. About how many different forms are needed etc.If you find a nice person you will get help.If not call another lender.yesterday ,working on my first SS, the LM guy said his kit coming by fax is just 3 pages.I m sure I ll have all the answers after my first deal.Good luck
A Low BPO will help your negotiating. When they ask for the contact on the BPO, you should give them your number instead of the homeowner. As far as repairs go, get some estimates and submit the highest ones to the lender. I think they will only want structural repairs or repairs that will keep code enforcement from writing up the place.