I am a newbie and would love your guys opinions and help… I am trying to do a short sale deal with a home financed with a 1st and 2nd with country wide… 1st is for ~$167K the 2nd is ~185K… So total ~$352K and home owner is behind (on both) by about 11 months, NOW house FMV is ~200-250K… Now this is pretty late but i want to try and do a SS…
I contacted CountryWide and they said to provide a purchase agreement, a HUD1, a hardship letter and the homeowners w2… The home owner has been unemployed for the better part of 2 years and has no job and basically used his savings to pay his mortgages
The Kicker here is the SHERIFFS SALE IS FEB 11th… So in 6 days!
My questions:
If i submit an offer will CW hold of on the sherrifs sale till we can talk and negotiate? Or is it just too late?
What should i offer on a house like this? Its a 5 bedroom 3 bath, 4 story house…
What happens with the 2nd, since both are with country wide should i just give them an offer to cover both loans?
Some states it’s not difficult to postpone a sale date (not expensive), others it’s very expensive and the bank will only postpone if seller/buyer pays the postponement fee.
I am in MN. You could probably get the SS postponed if you have a valid contract but you dont need to because there is a 6 month redemption period for the homeowner.
If you need some help running comps on the property and some help walking through this I can help you. I have a Real Estate License and am a Realtor and all I do is Short Sale/Foreclosure work.
Because the property is in Minnesota, your negotiator will most likely not postpone the sale date because it costs the bank to postpone a sale date whereas the borrower can redeem property for free.
I never postpone in states like Minnesota or Michigan where there is a redemption. You have to really explain it to the seller so they don’t get scared/angry when the bank does not postpone the sale so they really understand how the redemption period works.
Strange,
I actually have not had a ounce of trouble ever postponing a date. Besides it really helps the homeowners when you can postpone the SS and close prior to it, then they dont have a foreclosure on their record. Yes it is important to explain the whole process to anyone you work with as the better their understanding the easier they are to work withh is what I have found.
As far as I’m aware-- and I’ve spoken to my management about this several times-- a short sale is reported to the credit report the same way whether before the FSL or in redemption period. If a short sale is completed in redemption is says that it was settled not settled after foreclosure. That’s how we’re taught in the training for properties in redemption…
I don’t have a problem postponing in states like California, Nevada, Arizona, Washington, etc. It’s states like Massachusetts, Ohio, Georgia, NY, Maryland (and others) that are extremely difficult and expensive. In those states I’ll only postpone if buyer/seller pays postponement plus typically a month payment.
Thanks for all the input! So im curious how does the redemption work? Will the bank still ask for all the money? If they owe 358-360K on a house that is really worth 250K - ~ 100K fixup costs… How would you show the bank all the stuff that needs to be done to bring the house to the 250K price?
You should be able to find very accurate redemption information in your State Code. Just google your Secretary of State (SOS Minnesota) or Minnesota State Code.
I am in Alabama we have a one year right-of-Redemption. Here everyone talks about redeeming, but when they start the process very few actually do it but of the all of the Lawful Redemption Charges the bank is allowed to add to the foreclosure amount under our State Code.
Also, at what point to do you guys start the offer price? With the info listed above what would you guys enter for the first offer price? I am being told by some to start in the $80K range and have them bid me up… What strategies would you guys use? Also, whats the most you would pay?
Also, how do i show the bank the extent of work needed… New appliances, possible roof work, external cement driveway and entrance/walkway stairs work, basement sewer flooding/clean up work… Trying to use all of these as bargaining chips…
I would love to hear from the seasoned pros on this, as i hear that if the bank feels your fresh meat they take you for a ride…