Honestly, I am dealing with a similar file right now, the first of it’s kind for me, where my homeowner is going through a divorce and has had his $500,000 home on the market now for 4 months at $445,000 without 1 offer. It’s a beautiful, 6000 sqft home, I honestly am not sure why it has not sold but I am simply going to attempt to work it as I would anyother, having my homeowner explain in his hardship letter that he cannot continue to make payments on the property anymore, and a refinance would only prolong his situation, so he will let it go back to the bank if they will not work something out. Hopefully it works. I think that you should probably do the same and see where it leads you, hopefully where you want to go.
Good luck on that file. Sounds like you have done SS in the past. Can you address my question as far as from past experience what % of the SS’s do you get the lender to sell to you prior to foreclosure, when the homeowner obviously isn’t going to pay the lender? thanks
rsupplee:
As far as SS prior to foreclosure it depends on the situation. I have listed several homes and one as recently as 6 months ago that turned in to short sales. It was not the intention of the owner to have this happen. I will try to keep this short. Owner calls me wants to list their home. I go out interview as I am a Realtor. I list the house put in MLS etc. One case an owner died, spouse left, no money payements get behind while listed. Another example, elderly couple refinanced home to get what little equity they had to pay medication costs etc. Predatory lender took advantage of them. >:( This is the example I will use. When I listed the home they were making the payment but in time were not going to be able to. Well it took a little less than 60 days to sell the home. In that time the husband died and the situation became desperate for the wife. I had an offer to purchase in my hands owner accepted etc…we had a deal. I sent package in for title work etc and get paperwork back 10 days later. Owner has a 15,000 prepayment on the loan, and some other lender fees. It was about 20k she would have had to come to closing with. She absolutely positively did not have the money and no way to get it. In a typical real estate trans action it would not have closed. I went to work for my elderly client with her best interest in mind. I called the bank and laid it on the line for them. I expained the situation to them, told them I have a buyer for the house etc and that we were ready to close. I then told them that they had 2 choices. Shortsale or foreclosure. I really came down hard on them because there really wasn’t a choice for this lady. She was broke. I also told them that they needed to make there minds up in 48hrs or the buyer was going to walk. Needless to say they worked out the shortsale in record time. This shortsale was not for investment purposes for a buyer. She paid market value for the house. So it was a little easier for the bank to accept it. Still though the lady was short on the mortgage and had a sizeable prepayment penalty.
I must be getting older, because I got it!..and it was funny. Real funny.
Keith
I got the short sale package from the bank and it says I need a listing history and a copy of the listing agreement. I have a friendily realtor who can write up a listing agreement, but what about the listing history? Since it will only be listed a few days it wont really have a history Should the property be priced high or low?
I also need an estimated settlement statement from closing agent showing closing cost. Is the closing agent the R.E. agent? Anyone have an example of how to prepare one of these? Thanks
What they probably want is prior listing history up to current. Has the home been on the market? Was it on the market in the recent past? Have your Realtor check from today backwards and just give them all the history. If the Realtor is going to list or provide BPO I would go low. Bank isn’t stupid though. They won’t make decision with just one BPO I wouldn’t think. As far as the HUD1 goes (settlement statement) the title company prepares this. Are you financing the purchase? If you are Your mortgage costs plus title fees will appear on the HUD1. You should be able to estimate title insurance costs, fees, taxes and your mortgage costs pretty accurately. Even better if you are financing you can have your mortgage person prepare a “good faith estimate” and then add the title fees. GFE’s are usually on the high side so you should be safe with figures.
If you are not financing go to title company and they will be able to provide costs.
Hope this answers your questions.
I am still a little confused about listing the property. The bank wants a copy of the current listing agreement. She just signed a listing agreement with my realtor but how hard should the realtor work to sell this property. The owner tried to sell the home two years ago with no luck so I have that info on my side. I would prefer if nobody made an offer on the home. That would be to my advantage? We already have a sales contract and will be mailing the completed SS package to the lender next week. We have a couple of months before the property will be auctioned.
Here are the numbers in case anybody wants to suggest a way to maximize this deals potential.-thanks
ARV- 275k
Repair- 55k
loan balance- 150k
arrears- 50k
Sorry but I forgot to ask this question in the previous post. If the property is listed then the bank is prepared to pay a brokers commission, correct? Would not they be better off dealing directly with me and saving 6%? Am I missing something?
Well if the home is listed get a copy over to the bank. If they have unreasonable expectations that will be their problem in the end. All you can do is make the offer that is in line with your buying criteria. Yes, if there are no offers of course that will work to your advantage. On the other hand the bank is going to do what the bank is going to do. It could take months to negotiate the SS. I have one currently that is going on 60 days of negotiation. It’s amazing how much time they think they have. As far as the numbers go you know what will work and what repairs need to be done. Make the offer that makes sense and if they don’t want to deal, walk away from it and just watch it. If it does not sell, which it sounds like it won’t from past history, they will lower the price and will eventually come to a point where they will deal with you. It always seems to go that way. One example of waiting for me: I submitted an offer on a property and it was rejected. Eight months later they lowered the price to 10k above what my original offer was for. I submitted the same offer again and got the house. I guess patience is still a virtue!
“I must be getting older, because I got it!..and it was funny. Real funny.”
i doughnut abought you butt i can bearly undurstand some of the stough beeing ritten hear adn awl hte runon sentunces adn stough I cant figyour out wats beeing sed adn tits haard to beeleave sum peeple khall themseps investurs adn awl is this a goud plase for a peeriodd?
Since I will be buying, if all goes well, this property with cash. Do I fill out the hud-1? And if so are their any examples out there?
Update-
Talked to the Loss mit person monday and was told no go with with my initial offer. I upped the offer 20k since I knew my offer was way low given the fast appreciation of the area and property condition. I was again told no go. I was never told what they(the lender) would accept.
Here are some new numbers I have come up with for the property.
ARV- 280k-295k based on 3 sales within the past month.
Repairs- 35k-45k
Payoff to bank- 205k
Given these numbers it might not be to bad of an idea to reinstate the loan and then proceed with the rehab. Problem is I know how repair estimates can blossom and holding/selling costs can eat you alive. Any suggestions on how you would proceed?
Did you ask your loss mitigation specialist what they would accept?
Ask them what they would accept and if they tell you, discount it a and see if they accept that offer. If you can get them to accept 180-185 even 190 that should be a very good deal for you wholesale or retail, depending on how fast you could turn it around.
bovine, have you made any progress on getting the short sale completed. I am a homeowner with a potential buyer and i am trying to orchestrate this for them. I need to know step by step what needs to be done, as the person interested in buying is ready to pay cash. will he also have to deal with the IRS lein. Who does he contact first? Lender or IRS?
db-
I’m sorry but I am just as green as you. My best advice is to read EVERY post on this forum, even if you think it does not relate to your situation. Then do a google search for other real estate investing boards so you can read those posts as well.
As for my situation, incredibly the bank called me back and told me to submit a new contract with my last offer. They SAY they missed something on the BPO which I had already told them about. It seems like it might go through for under 170k. I’m not holding my breath but if it does I’ll be dancing the jig… Whatever that means.
GOOD!!! Keep us posted.
Why are you guys calling the owner a “client”? In a client relationship you represent the “client’s” best interest. Realtors, attorneys, and others have business relationships where there are fiduciary duties when you are an agent for the client.
Jan
Jan
Say what you want but I will always call them a client. Just as I did when a worked for a social service agency helping families get their lives back on track. Why is the use of the word client such a "hot button’ with you? What would you prefer we call the people we are helping out?
<<What would you prefer we call the people we are helping out?>>
“Property occupant”
…if you’re dealing with the bank, why is the person living in the house a “client”…?? The bank is your ‘client’. The person in the property should be thinking of nice names to call you…
Keith