Short sale advice? - Posted by Tracie-WI

Posted by Heather -Tx on February 26, 2003 at 19:06:02:

Thanks =) I was hoping that you hadn’t since my shortsale I am about to try is going for about 50 cents on the dollar LOL Never hurts to try, and I’ll at least have learned how to go into a shortsale!

Do they take into consideration how much there is owed deliquent on the property and how much it will cost them to take it back, repair and resell ? Or do they just look at the final FMV numbers of the area ? Thanks

Short sale advice? - Posted by Tracie-WI

Posted by Tracie-WI on February 26, 2003 at 13:42:32:

I haven’t done a deal yet, but got a call in response to my mailing. The guy is upside down on his loan. FMV is $150k (need to confirm). Total on 1st is $132k. Total on 2nd is $46k. Property taxes and utilities are current. No outstanding liens/judgments (need to do a search to confirm). Sale date has not yet been set. House is 6 years old and in good condition. Has been vacant for many months, but is winterized and not vandalized.

I have a signed authorization form from the owner to speak with the banks (1st is Wells Fargo; 2nd is Chase). I am working with the owner to compose a hardship letter. I will be faxing the authorization to Wells Fargo today.

Now, I understand the general short sale process. But I’m pretty unsure of the details. Such as, which bank do I approach first? Is my offer contingent on the other offer being accepted? If the house is in good shape, what else can I use to encourage the bank to consider a discount? My idea is to offer $60k for the 1st and $4k for the second. That’s a starting point. How high can I go? With a discount like that, my exit strategy would be to clean the place up and market it to a retail buyer.

This is about the extent of my knowledge, guys! Any suggestions or explanations would be great! Thanks! Also, I do have private $$$ available to make my offers.

Re: Short sale advice? - Posted by Grace

Posted by Grace on February 26, 2003 at 18:43:42:

Hi Traci

My experience with short sales has sadly been very dismal. I probably put together 10-15 this year and have not have any accepted. Sure they were willing to discount the loans some but I like to buy at 70% -75% minus fixup. Once they get a BPO done, especially on properties in fairly good conditon, the deal was dead.

The next thing I know these properties are being bid at the sheriff sale for 90% of FMV. Or soon I see these properties come up as REO’s with tons of offers at close to FMV.

Its my opinion that banks know its a hot market(here anyway)and are cashing in. Can’t blame them really.

I’m signed on for Sharon Higgonbotham and Dwan Bents short sale boot camp this summer. Hopefully I’ll learn some short sale finesse. And maybe this market slows up a bit so these banks will be begging me again to take these dogs off their hands.

Good luck

Re: Short sale advice? - Posted by theshortsalepro

Posted by theshortsalepro on February 26, 2003 at 15:44:12:

The first won’t agree to accept much less than the property’s confirmed FMV. Your lowball offer probably won’t get a formal response. The second would probably deal… but again, the only number that is material is the as-is, confirmed FMV.

Mortgagee’s asset managers (the decision makers) are pros in evaluating short sale offers. It’s their function to minimize losses. Ill-conceived and/or low ball offers generally don’t even make it to the deicsion makers’s desk.

Re: Short sale advice? - Posted by Heather -Tx

Posted by Heather -Tx on February 26, 2003 at 17:54:50:

This goes against what others have told me that do have experience with short sells. Have you done a actual short sell and speak from experience ? Or just what you have heard ?

Just curious,

Re: Short sale advice? - Posted by theshortsalepro

Posted by theshortsalepro on February 26, 2003 at 18:41:38:

I’ve participated in hundreds of short sales… as a transaction broker, a private consultant(TheShortSalePro), as an investor/speculator, and (formerly) as an asset manager for the then largest mortgage loan servicer in the USA.

But, it’s just my opinion. This is a dynamic industry.