Ok everyone explain this to me like I was five years old. Lets say I have a friend who is facing foreclosure and just for the sake of making it easy lets say he owes 100,000. I wake up one day and decide to try my first short sale and I havent breathed a word of it to anyone, what is my first, second, third step etc.
Have your friend sign at least 3 real estate purchase contract with you.
Get an Authroization to Relase Information document signed by your friend conttaing all the pertinent information that can be found.
Hve your friend sign a Power of Attorney for that property alone, nothing else.
Oh yet, give your friend a dollar to make sure this is a binding contract. No money, no contract
and so on.
I’ll the the others who have actually done short sales finish answering. But I am still in the learning phase. So if I messed up, they will correct me and I wont feel bad.
THe other thing you can do is to use the search link to find all the threads for short sales/foreclosures as well. THat would be faster. You can review it and then ask new questions based on what you learned. That is what I have been doing.
Steve gave you some good info; here are a few more suggestions.
I have the sellers sign a Quit Claim Deed and have them take that form and the Power of Attorney; have them notorized and return them to me.
I also supply the bank loan officer with the following;
- Interior and exterior pictures of the property. This will help convince the bank the property needs repairs.
- A letter from the seller stating they are not, will not, cannot make the payments or pay for the repairs on their property.
I currently purchase many pre-foreclosures from lenders directly or large brokers. These are sold for 70% of BPO (Brokers Price Opinion) less holding costs of generally 3 months, and these costs vary per property.
When you find yourself with this type of opportunity, you could complete the short-sale if this makes the most sense, or you could move to a subject-to or a lease-option. In all cases, let the bank know what your doing and have them give you permission to make the payments. I request the bank send me their permission in writing, fax, email or letter.
Just my two cents, go get’em!
Ray Rochefort
Managing Member
Purpose Investments LLC