Posted by B.L.Renfrow on December 11, 2003 at 12:26:01:
It all depends upon the state in which the property is located. For example, in NY there is NO redemption period following a foreclosure sale. Once it’s gone, that’s it. It’s then a REO, not a short sale candidate.
Brian (NY)
short sale negotiating strategy - Posted by sheldon
Posted by sheldon on December 11, 2003 at 07:20:12:
dear short sale people:
Need some advice on a short sale:
I have the 1st lender agreeing to a 60% short sale on a 101k house contingent on the second lender agreeing to only 1k on their 20k second.
I spoke to the second yesterday and they said my 1k offer was too low. We negotiated back and forth and then I said what would be their min price? They said we’ll get back to
me. Did not hear back yet.
My question is this:
What is the best way to negotiate this deal when I am caught between the 1st and 2nd lenders? The first says they’ll settle as long as the second agrees to their 1k terms. I don’t think that is going to fly.
So do I come to terms with the 2nd at some amount and then try to re-negoitate with the first or what??
I have already explained to the 2nd that if the house goes to foreclosure thay will lose all and they say that is a risk they are willing to take?
Where do I go with this??
Any comments or advice is appreciated.
Re: short sale negotiating strategy - Posted by Matthew
Posted by Matthew on December 11, 2003 at 18:12:25:
Sheldon-
all the previous comments ring true- however as a person who has done this many times , I 'd say it depends on your lien holders and your profit margins. I have found some companies don’t care what they get as long as they get something and others that want the moon.( today Aegis mortgage took 32k on a 71k balance- the debt was 8 yrs old and no payments were made ) just remember when the smoke clears and I assume you are flipping this, that on this deal you should in worst case walk with 20k. lets figure
house value 101k
1st lien -60k
2nd lien -10k
prenet +31k
resale at 95k pay 5k in closing costs and 5k in realtor fee = 20k net net walk away- aprox time 30 days or less. how far off am I?? nice Christmas Bonus$$$
Best regards,
Matt
Re: short sale negotiating strategy - Posted by Bess
Posted by Bess on December 11, 2003 at 11:02:14:
Seems like the old squeeze play to me. I would find out what the redemption period is after foreclosure. Because once the foreclosure takes place most bank/lenders give the homeowner a 4-6 month period to pay all arrearage. This is the 1st stage of the bank becoming the owner and the second is wiped out. You can still negotiate a short sale with the 1st mortgage holder. This is usually a short window of opportunity for the same short sale. I think its because it takes the bank that amount of time to do the paper work to get it in its REO dept. I would decide how much I can go up on the 2nd, because it doesn’t matter what the come back with its how much can you go up to make the deal still work for you. My next conversation with the 2nd would be “Well, I think I will have to walk away because this is as much as I can pay to make the deal work for me. I really wanted this to work but it can only work at the 1k? (or what ever you decide) is the amount that this can work” If you know what the redemptive period is and you stay in touch with your 1st. you can still do the same short sale deal.
Re: short sale negotiating strategy - Posted by Larry (TX)
Posted by Larry (TX) on December 11, 2003 at 10:54:20:
How soon before the house goes into foreclosure? It my be that you just have to wait it out a little longer with the 2nd and see if they change there position at the last minute.
Larry