I am just learning about short sales. Do you need to contact the home owner first or the bank? I am not sure if you have to get the homeowners permission to submit an offer or just talk to the bank. Any feedback would be greatly appreciated.
I am in same situation. I found a property appraised at 70K. Seller has 60K in financing. I believe that the appraisals are usually on the higher side. So very little equity.
Market Rent is $600 and his mortgage payment is $550. So cash flow is also not great.
I want to see if I can short sale and talk to bank for accepting less.
What contract do I need to sign with seller first to make sure he does not walk out later.
Your feedback will be very helpful.
First: I have the homeowner sign an agreement for services.
Second: they need to sign an authorazation to release form. The lender will not talk to you unless you have one.
Third: have them sign 3 RE purchase agreements
forth: Call the loss/mit dept of the lender and find out who actually has the file.
fifth: Call that person and fax them the signed auth to release form.
sixth: Call them back and find out what docs they want to do a short sale.
that should get you started
shyshyshy,
As a finer point, if a seller has a $550 mortgage payment and rents are $600, there will be a negative cashflow – guaranteed, take it to the bank.
The seller currently does not account for maintenance, management, vacancy, etc.
The good news is that if the seller is paying $550 on a $60K property, their interest rate is probably high (unless taxes are really high where you are)!
Keith
Thanks for the info.
Jason
Where is a good place to to find some of these document?
Jason
You can find any form you need free on the net. Just do a google.
Thank You! I will check that out.
Jason
I met seller today morning and he is open to idea of short sale. I am not sure he understands short sale. I dont know how to explain it to him.
I will go tonight and try to sign these document with him for purchase of property and put the short sale clause in it. Then after that is done I will explain him what needs to be done. Will keep you guy updated.
Can I do short sale of Probate property also ?… Please let me know.
Thanks!!
Hey TN Investor what exactly does the authorization form do?
Is it to release information about account or release them from loan? Does the buyer, seller, and bank get a copy of purchase agreement? Just wondering why you need three. Sorry for all the questions I have never done a short sale before.
Thanks for the help.
Jason
The authorization to release information is the homeowner giving the lender permission to talk to you. You can’t just call the lender and they tell you what you want to know without prior concent of the homeowner. The 3 RE purchase forms is so when your first offer is refused…you still have 2 more signed ones to counter back with. I just keeps you from having to go back top the homeowner all the time…there is lots of info on the net as to the procedures of doing a short sale…sounds like you havn’t read any of them.