My brother is WAY behind on his morgage (5-6 mo.) and his bank told him and his wife that if they aren’t able to catch up within 90 days that they will lose the property. So I thought maybe I can help him out by doing a short sale on his home (if the bank allows it) to avoid foreclosure. His wife called the bank & asked if they will allow a short sale to be done on their property but the bank said that in order for a short sale to be done the property must have to be on the market for at least 90 days.
I don’t know if this is true but whether it is or it isn’t can somebody give me some advise on what to do in this kind of situation? I hope I explained this right but if you need more info, please ask me.Thank you!
What if the bank does allow a short sale, can I Assign a short sale deal over to another investor? If not, can somebody please help me with this situation? I mean, what other options do I have where I can help the seller and make some money at the same time?
Every lender will have their own rules surrounding a listing agreement with an agent. 90 days seems pretty stiff, though. This is where your negotiating skills come in.
Lenders typically don’t allow assignments, although I am sure there are exceptions. I would try to do a double close.
One other thing… some lenders require an arms-length transaction. If they find out you are the home-owner’s brother, they may not allow the deal. They probably won’t ask unless you have the same last name (which you probably do). Something to think about.
I AM A REALTOR IN FL AND SHORT SALES ARE A BIG THING HERE, THERE ARE TOO MANY FORCLOSURES WITH PEOPLE OWEING MORE MONEY ON THE HOUSE THAN THE HOUSE IS WORTH. IT IS TRUE THAT THE HOUSE HAS TO BE ON THE MARKET FOR 90 DAYS, THE REALTOR NEEDS TO GET ESTIMATES OF ANY REPAIRS TO MAKE THE HOUSE MARKETABLE, YOU NEED TO HAVE A CONTRACT OF SALE ON THE HOUSE BEFORE THE MORTGAGE CO WILL EVEN CONSIDER DOING A SHORT SALE AND ALSO I BELIEVE THAT THE OWNER WILL STILL OWE THE MORT CO THE DIFFERENCE BETWEEN THE SELLING PRICE AND WHAT THE OWNER OWES FOR THE HOUSE. IT’S A TOUGH WORLD OUT THERE. MANY PEOPLE ARE LOSING THEIR HOMES, 2 SMALLER MORTGAGE CO’S HERE HAVE GONE BANKRUPT THAT I KNOW OF, AND THE MORT CO’S GAVE ALOT OF FIXED RATE 2 YR MORTGAGES WITH AN ADJUSTABLE RATE AFTER THE 2 YRS WERE UP, AND PEOPLE JUST CANNOT AFFORD THEIR HOMES.
ALSO WHEN YOU TALK WITH THE LENDING CO, YOU NEED LET THEM KNOW THAT YOU WANT 5 OR 6% FOR ALL OF THE WORK THAT YOU ARE DOING. THEY WILL TRY TO PAY YOU 2 OR 3%, BUT IF YOU ARE ABLE TO GET THE SHORT SALE, YOU WILL BE DOING ALOT OF WORK. ESTIMATES, REALTOR REMARKS AFTER SEEING THE HOME, COMPS AND ALOT OF HOURS TALKING WITH THE LENDING CO. IT IS A TIME CONSUMING PROJECT THAT IS WORTH IT TO YOU BECAUSE IT’S YOUR FAMILY BUT YOU WILL HAVE YOUR WORK CUT OUT FOR YOU. AND WHEN YOU GET AN OFFER, ON THE CONTRACT YOU SHOULD GIVE ATLEAST 2 MONTHS CLOSING DATE SO YOU WILL HAVE ENOUGH TIME TO GET THROUGH ALL THE RED TAPE.
WHEN YOU CALL THE LENDING CO, YOU NEED TO TALK TO THE LOSS MITIGATION DEPT TO FIND OUT EXACTLY WHAT THEY WANT AND NEED FROM YOU REGARDING THE PROPERTY.
turborocket, you said that you would try doing a double close. I’m really not sure how a double close works but can you or someone help me out here by explaining how exactly that works? And does that mean that I’m going to have to use my own money and credit to do this? Because If I am, then it’s not going to work this way because I just started a new job that doesn’t take taxes out of my checks, which means I have to pay my own taxes at the end of the year.Also I’ll have to wait 2 yrs to show that I’ve been paying taxes for at least 2 yrs to get approved for a loan due to my “tax free” job. This is the reason why I myself don’t have a house. I live in an APT making another investor rich. :flush
A double close is when you negotiate with the bank a lower price for the property and then find a buyer for the property at a higher price (dont forget ALL your costs) and sell it to them. You recieve the spread minus any cost associated with the deal. (real estate commissions, closing costs, repairs). Its a great way to make some quick cash if you can find the right deal. I just did a really simple one…made 12K. My broker just did one and make 22K.
No, a double close is when you have one attorney that does two closings in one day. Example, you show up at 10AM and (sell) the property to your buyer. Then later ON THE SAME DAY, has to be the same day, you use the funds from the buyer to buy the property you sold him. The trickiest part about double closings is to find an attorney that will do it.
This is how you can “buy” a property with no money of yours at all. The attorney will disperse the funds, a check going to mortgage company to pay off the agreed upon mortgage. Then a check to you for the difference between what you bought and sold for.
You can imagine what kind of mess you would be in if, you sold a property that later on that day you were unable to buy.
Ok so here are the comps to this property,finally:
Again, the house was originally bought for $117 and the sellers owe $114k.
The CMA show’s that the houses in the area are selling for Min: $83,600
Average: $94,500
Max: $113,000
Does anybody still think that I can do a double close ,or if not, is their ANYTHING that I can do to make some money on this property? Thanks!
The property’s comps show’s as follows:
Min: $83,600
Average: $94,500
Max: $113,000
Can I still do something with this property? Remember it originally was bought for 117k and owner owes 114k and the owner also says they really don’t care what happens to the property or what it sells for IF someone buys because it’s going to get foreclosed on anyway. What do you think I can do IF I can do something?
This is a house you truly can not do anything with. Your comps support a lower price than what the owner still owes on the property. feel free to email me and I can better explain. Sheila
That’s what I kind of figured but I just wanted to be 100% sure before I just blew it off. Thanks to everyone for their thoughts. Happy Investing to All!!
Is there a second mortgage on the property? If there is, and it is sizeable, you CAN go for a short sale, and CREATE equity. If there is only ONE mortgage, then you will probably not be a good candidate for a short sale. :cool