How would I go about finding a good and experienced negotiator to represent my interest to the Lender? I have a contract on a house in default valued at $360K with $260K owed on the balance. Having taken a home course in Short Sales I know just enough to be dangerous and negotiate effectively with the Seller. The bank however would probably eat my lunch. I need someone who understands the nuances and language of Loss Mitigators. TIA
just abit of why not ?? If you are going to be doing this kind of real estate may be look in to a lm course as well to go with the short sale course you have all ready ??
I know it is not much help now but is a food for thought .
I’d say go for it yourself. I am not saying to just wing it - learn as much as possible and get advice. I am in the same position and my thinking is that if these are skills I need to develop, then I might as well start now.
Be confident and persistent. By the way, there is an e-book on negotiating on this site called “Negotiate Foreclosures like a SWAT Team Leader” by Joseph Kaiser. I found it quite helpful.
Besides, the principles of negotiation are the same. They are just applied differently in different situations.
By the way, why short sale with equity?
Good luck!
There are people that charges $2500 to negotiate the short sale. If you have a complete short sale paackage ready and a structural bid and know what you are doing and can get thru to the right department you might be able to do it your self.
I’ve been wondering all along if this is an ideal SS candidate. The reason for pursuing it initially is to get the LTV from 72% to 60% to potentially attract a private lender. But I’m not stuck on that notion. The Seller has signed, notarized and witnessed the docs including Warranty Deed and faxed them to me. The originals are in the mail. (The property and Seller are out of town). I thought it would be a good idea for someone other than myself to initiate the correspondence with the Lender. But I’m open to suggestions.
When a home has negative LTV (upside down) or LTV approaches zero and there are repairs needed a lender will negotiate, but, frankly, with $100,000 in equity I can’t imagine any loss mitigation department being that hot to trot.
I do on some occasion help rich friends by initiating contact with the mitigation department and not the collection department
and getting the deal for my clients. I get paid by doing their loan. I can tell you the process and what is needed, but I do not do paperwork. Yes, as from lender to another and knowing what to say is better than a private investors approaching them.
If you know what… and what not… to say to a loss mitigation department Heaven knows I would be all ears!!!
I know that I am not directly answering your questions, but here’s how I look at it:
- You bought a property for $360K.
- Prior owner owes $260K.
Unless you have NOT executed the contract (#1), it is a done deal. Correct?
What would you or someone else say to the bank (in whatever department), so that the proceeds from the sale will be less than what is owed? Like wheelema said, I would be disturbed and somewhat excited if one can short 30% equity deal (aside from grossly inflating contractor’s estimates).
Besides, even if the bank somehow decides to accept 5-10K less than the balance, it does not change your cost of purchasing at 360K.
Am I off base on these points?
Here is the deal! Loss mitigation department are there to cut the the bad loss of notes on the books.It cost them$ 30,000 to $80,000 to foreclose. Tack on property damage on top of that! By law they are suppose to have certain liquid capital / portfolio to lend etc… The longer the bad note is on the books the interest that are accrued are increasing …times that by the volume they have… look at Option One losses…Hurting parent company… HR Block… Look at Ameriquest also…no SuperBowl ad … maybe? Na! Here is how I approach them… My name is John with xxx. I need your loss mitigation department. Jack, This is John with xxx . I have rich investors with good credit… fico 700Plus to do a win -win situation . Help the client save his credit ,his history , his pride… infront of his kids… put food on this guys table so the kids do not go hungry…he can not afford the house no more… I have a complete SS package that will make your job easier… God know how hard we all work for bare wages… As one professional to another I am here to help you get this bad debt off your books and also need your expertise to get this done.( even if you are an expert… be humble … be respectful of thier time… just kiss ass if you have to to get an approval… Bottom-line… that is money you can take it to the bank … Collection department are their to collect debt. They can not do the deal. Make sure you are talking to the right department. Hell, the client have exhausted all his options to reinstate this loan… he do not have the 25%-to 50% of the arrears that you will require, Jack… P.S. Get a structural bid too. Have the clients call contractors for free home remodel estimate… You know these guys will jack up the bill. Take a couple of these estimate… be real estimate… show the bank this is addition what it will take to bring the house to comps… code to sell. get the idea? Paint a picture… Sell the sizzle… not the steak! Have cofident and know your stuff… Command respect … people will give it. I do all this from my office. I can do all my business by laptop and satellite phone. Never have to ever go to the bank. Bank professional… are required to be nice and represent the bank as a good image…Being on the phone .etc… get the picture?People chase after my business. I am not cheap. This is an elite mens club… I only deal with clients who make over 300,000 - 800,000and Plus a year who could afford my services… You want to play … you have to pay! Period. Hope this help you out. Hope you can join the club.
100K,
My contract with the seller is for the amount they owe which is 260K with an addendum that specifies that we will attempt to negotiate with their lender to discount this amount with no guarantees. The property is assessed at 190K…something I’ll be sure to specify to the BPO Agent. Since the bank is owed 260K I believe an 18% discount of 215K is within their consideration. As you pointed out, if the BPO comes in at appraisal value, then my chances of a discount are slim. It speaks to the issue that Johnny Q made in the above post by attempting to sell the sizzle to the lender. Plus the fact that we’re in the last quarter of the year will not hurt my chances since banks are trying to clear the books for the new fiscal year. Time will tell.
Oki. I think I understand. I think if the BPO comes in at 360K (fair market value), your chances for shorting a loan are none. Just my opinion. Is it possible to “influence” BPO from 360K to 260K? I don’t know, but I guess you’ll find out and let us know, right?
Good luck! And let us know how it goes!
???
With 100k in equity, have you considered a Sub2 Sale? A Sub2 seems to be a better approach to this one from what you have said.
Hey cdodson,
Not to pile on or anything, but your housing market cannot be so slow as to where the bank is going to negotiate with you when theres 100k in equity in the home. Frankly, I am surprised other investors haven’t jumped on this one already. If your numbers are correct, you should take this one on with a hard money lender. Double check your numbers and make a move.
Good Luck,
Gregg
Short Sale are not a easy to negotiate as they appear. I find better luck by hiring an REO Agent who is already familiar with REO and better when that agent has relationships with the servicer.
REO Forum
See You at the next forum
I was reading this old post and here is my take on a convesation that is 9 months old:
I do several short-sales per year (between 10 and 12 finilized deals/year and growing), I do them both as an real estate agent representing the distressed seller and find them a buyer and do them for myself as an investor. (personal code of conduct is that I do buy houses I personally list for sale or viceversa).
My experiece is that banks wants to negotiate but they do not want to loose money. They will fight for eveery penny and will try to get full appraised value. If the property needs repairs, they will consider them.
In addition to what was said before in reference to get to the department, explain the situation with emotions involved and be humble on your approach(which he is a proffesional and on target with negotiations), I also (I forgot if he mentioned these) do a BPO with pictures, support all repairs with quotes from handymen or needed vendors and sometimes, if needed, I even do a virtal-tour of the property with emphasis on damages … if you know what I mean!
Why do I do all these if banks will request their own BPO anyway? Well, if my job is done right and credible, they may not request a BPO. More importantly, let me give you a case I am currently working here in Atlanta (I have it listed for sale).
Property appraised by bank’s BPO for $135K and in need of $280 in repairs (not a typo, I meant just below 3 hundred dollars). Seller owes about $129K. My BPO came to high $120’s if in good condition but property needs new carpet, patching holes and paint, may need roof repairs, new A/C, may also need some siding repaired/replaced (LP siding), etc.
When negotiating with bank, they wanted to net $128K. I had to get more back up info and since most of the information is via fax, the pictures of the BPO were black and white and fax quality … that is when I create a virtual tour of the property, fax them the link and challenge their numbers. I later realized that the person or company doing the BPO was the broker that get to sell the bank’s foreclosure. I comfronted the negotiator with the fact that the broker will be bios and try to ruin all deals in order for them to sell it as a foreclosure after shortsale is declined.
The more you can proof the bank the better and only practice will give you the knowledge and experiece needed.
Who pays me? The bank! If I do them for myself I sometimes include a commission to be paid to me and sometimes I do not (depends on the deal and how I negotiated it). If I represent the seller or the buyer, the bank usually pays me so there is no cost to seller or buyer. In order for the bank to pay me, what some investors I work with do is that once the house is selected and if is not listed, they call me and we get the seller to list it with me. If the property is not listed and won’t be listed, then the buyer pays my fee.