I have an owner who wanting to get rid of a home(got married and doesn’t want the wife’s home). It has been listed with a realtor for 6 months without any activity. They are not behind on payments. The ARV on the home is about $108,000. The mortgage balance is about $92,000. The home is totally outdated(70s styling) and has some slight foundation or joist issues that has caused some slight sagging. Obviously, there is not enough equity in the property without short saling it. The owner is about to take it off of the market and let it go.
My question is, is it possible to initiate a short sale without the loan being in arrears?
It will be hard to do if the seller is not behind in payments. Unless you can convince the bank that the owner is not capable of making anymore payments which doesn’t seem to be the case.
I had one of these, and I had the HO contact the bank, explain their financial circumstances, and that foreclosure is inevitable, if that is the case. Then ask if they would consider a SS.
I’m finishing a deal now that came to me prior to the property being in foreclosure. I began negotiations while all debts were current. Yes, the homeowner did have to stop making payments before they would look at the short sale pkg because in order to deal with the foreclosure department in most banks there has to be a file started on the loan.
So yes, it is possible to initiate a short sale. I would prefer this above all else personally. When I can begin working with the banks and the homeowner prior to them being foreclosures it allows me to build a much stronger case. It gives me time to market the property and show the banks that numerous different attempts to sell the property have been made and here are the results.
I try to show the bank that accepting the short sale would recoup more of their losses than as an REO. The longer I can make them think they will have the property as an REO the better chances I have at a short sale.