I just have a few clarification questions in regards to the short sale process.
Steps
- Meet with owner to get letter of authorization signed
- Get letter to bank and possibly postpone foreclosure
- Get realtor to setup listing agreement with homeowner to keep owner from selling?
- Call bank to let them know about property/homeowner situation and call anyone with a lien on the property to discount it and get payoff statement.
- Get home inspection done (either hire it out OR write your own inspection in a professional looking way).
- Get short sale packet info from homeowner. Get purchase agreement signed by homeowner at this time OR at the same time I get letter of auth???
- Get settlement statement (HUD 1) from homeowner as well. I’m confused here. Is this something I provide to a title company or does a title company need to fill out the HUD 1?
- Send entire packet to the bank at one time.
- After negotiating price and is accepted, WHAT NOW? I know the faster I can close, the more likely to get accepted, but at this point how do I work in my buyer(s) if I don’t intend to buy? Do I double close and if so, do I have to bring my own funds? Or can I simply have my buyers funds fund the deal doing a double close somehow?
- How does a title co get involved and should I be submitting any of these docs to a title co?
- At what point exactly do I have a realtor list the property on MLS? After the listing agreement or after offer is accepted?
- What exactly is the difference between a standard P&S and an option to purchase contract and when should I be getting this signed by homeowner?? How does this help me at closing vs. using p&s
Sorry for all the Questions!!! I’m a complete newb on SS :smile
Those are questions that others, including myself, have written pages to discuss.
Here are a few answers:
- you complete the HUD 1 and send it into the bank with the short sale package
- the title company gets involved after the BPO - when they run a title search. You do this after the bank gives a counteroffer. If this counteroffer is indicative that they are willing to approve a discount, then do the search.
- Listing depends on the market. We recommend that our students list immediately in Ca,Az, and FL. Everywhere else we do the actual listing after the BPO.
- For more about working with Realtors, see Realtor Renaissance
- The option is used on the A to B transaction (bank to investor), and then use P&S on the B to C (investor to end buyer). Get all paperwork signed before submitting package to bank.
Also check our The Referral Renaissance. And for more on options, see The Death of the Land Trust
box2good:
The purchase price would be the price you AND the homeowner have agreed to offer the bank. So your purchase price would be 70K. Yes you should have the homeowner sign the deed over to you so that you can control the property during negotiations with the bank.
ballgum:
To answer #9-Double closing is the best way to off-load your note or property to an end buyer but you must know that you have to have the funds to close the first deal between you and bank first. There are services that will fund the deal for you at 1-10% of the purchase price. You can google Shortsale Funding. Most of these funding services will also provide a pre-qual letter so that you can provide proof of funds in your shortsale package. It is a good idea to have your end buyer and your funding in place before or while negotiating with the bank so that you can keep your promise on closing fast.
What???
Yes you should have the homeowner sign the deed over to you so that you can control the property during negotiations with the bank.
My question is … what about title seasoning??
I just curious how you get around this? I know the answer.