I am new to Short Sales. I may have one here shortly. Homeowner has about 50K equity in the property. They are in the late stages of foreclosure after trying (and failing) to obtain refinance. In lieu of having a Foreclosure on their already fractured credit report, they are considering offers for short sales. They put in 20K in the house and would basically lose all of it in a short sale since legally, homeowners in default are not allowed to profit from a short sale.
Any advice or am I pretty much correct that the most they get out of a short sale is that they won’t have a foreclosure on their credit report?
How do you know it is a short sale candidate?
If there is equity and the property is in good shape and numbers make sense, give the seller an offer subject to the existing loan and bring it current.
Why are they in default? is there a hardship? Sellers cannot profit from a shortsale, in my state you may offer seller a small amount “move out money”, but banks dont like to see anything paid out.
I would read all posts here about short sales to get an idea of whats all about; but if its in final stages, you wont have time to learn all the steps and do it right in a rush - start reading all about it.
You could do a bill of sale for any property the want to sell ie lawn mower, stove, washer an dryer…or any thing they want to sell to you…It would of course have to be handled out side of closing and on a different day. Just make sure you do this once the Short Sale is closed you don’t want to come out of pocket for anything. Hope that helps :guns
The bank will not allow anything to come out of escrow to the seller. Every short sale acceptance I’ve seen thus far has included the following in a long list of the bank’s terms: “Seller shall net zero $0.00 dollars from the sale”.
So, what I do is give them a moving allowance…a couple grand to get a u-haul and deposit on a rental. Do this outside of escrow after it closes.
The Real Question here is what is the house worth?
If its a 150k house with 50k Equity. SELL IT
If its a 2,000,000.00 house with 50k Equity Short Sale it!