I am pursuing a short sale (in Texas) and want to give the seller some cash . I have heard that mortgage companies frown on the seller getting anything as whatever they have is owed to the mortgage. Is this a problem that can be overcome ? And how ? Thanks , Mike
Not sure what you mean. How can a seller with negative equity get profit?
If the seller is doing a short sale, the key component is that they WON’T get profit, which is why it’s a short sale. If there’s profit/equity after all fees, the bank isn’t taking less and there is usually no short sale.
You may need to better understand short sales. http://www.reiclub.com/articles/ten-short-sale-questions. Of course, all rules are broken at some point, but I haven’t seen a bank take less than what is owed, but let the seller make a profit.
Hi Dee , thanks for your reply. Sorry I did not make it all clear. Zillow shows the property to be worth about 80k, seller owes about 60k ( having taken a mortgage out on her previously paid off home about a year ago ) is in arrears on prop. of 4 months. She would like to sell property before losing it as she is in over her head and can not catch it up ( she could kick herself for doing it now) even tho she has a PT job which does not pay much. She is 65 and ready to retire on about $1000 mo. She has spent the money she got from the mort co and would sell with just a piddling cash out. Perhaps if I give her the piddling for some personal property(like furniture, etc) I could try this as a short sale prior to forclosure. Thanks again, Ekim
If you haven’t worked short sales and have no experience, you’re going to hurt the seller. They take time and knowledge of the process. You try to pay the seller if you want, but I’d disclose as much as possible to the bank so it doesn’t come back to bite anyone.
Thanks Dee, I did read your suggested material and I understand. I will either try to buy the property before it goes to foreclosure for 75% of value or wait till the mortgage co. has it and offer 40% depending on whether I can make the #s work for everybody! Thanks , Ekim
Remebmer the bank states the HO is not to recieve anything from the proceeds of the sale. However that said, doesnt stop you from buying their personal property for a perceived value!!! Make sure you have a Bill of Sale to back you up.