matshingdo001 made this statement on another thread.
“a Shortsale is not rocket science”
Well, it’s close, at least in the world of investing. This is RE arbitrage and it’s important to conduct the process legally, ethically and morally; to complete the transaction such that everyone feels like they are a winner, particularly the borrower and the end buyer. :beer
These are the consumers in the transaction and their interests must be respected and protected.
With some Banks adding a condition to the payoff that “no transactions can occur for 30 days after closing”, this complicates things (though that condition in and of itself may be an illegal deed restriction), but banks love to throw zingers at investors all of the time. They dislike investors like investors dislike REALTORS, so they are constantly throwing up road blocks to make our lives miserable.
Add into the equation the intricacies of a title holding land trust or an option contract for deed; the responsibilities of being a Trustee who will manage the trust for the beneficiaries during the process, and one can see that this is not for the weak-minded, faint of heart, or someone who is not willing to do a LOT of homework prior to attempting to do their first few deals. I offer that you must develop a cast iron stomach to work short sales, or you will not succeed.
I know Short Sales are all the rage right now, and there are a number of RE Gurus hawking programs morning, noon, and night, but if Short Sales were so lucrative for them, why did they even take the time to develop these programs to sell? As the market is now becoming flooded with these gurus pitching their wares, we are nearing the point where rookies will enter the business and expose themselves to lots of legal liability. Because of the cheaper prices for these programs, and our innate desire to “get rich quick” through any means possible, people what to take short cuts by not thoroughly understanding the processes. That can be very costly.
While I don’t want to rain on anyone’s parade, I would suggest that one should treat this endeavor with great respect. The business acumen required to pull off win-win-win-win-win-win-win transactions is high!
A WIN for the borrower is paramount; a WIN for the bank, a WIN for a listing agent, a WIN for buyers agent, and a WIN for the end-buyer’s lender. Then there is one very important party – the ultimate retail purchaser and it is essential that this party feel like they are as much a winner as the borrower. That’s a lot of people to keep happy! :biggrin
Finally, if you’re lucky, there is a WIN for numero uno – the investor who put the whole deal together! This is no minor undertaking so the rewards can be great, yet so are the risks. :bobble
There are seven “wins” involved in this transaction, at a MINIMUM. Add to this a few more lien holders and you’ve got yourself a colossal undertaking. :help
To treat the complexity of this endeavor trivially would be a grevious error, IMHO. Arbitrage in any investment is flying at a high altidude; to not understand the complexities and the risks is to doom yourself to failure at best, and legal, ethical, and moral dillemmas, at worst. These could ruin your day, or your life. :banghead
Make no mistake about this. Though Short Sales are NOT Rocket Science, one should treat the business as though it were, and with a great deal of professional respect.
My 2 cents worth … :deal