Posted by Larry TX on April 13, 2004 at 09:25:45:
I’m mainly thinking about the second. But if I could get the first to come down a couple of thousand, that would be nice too. I know it’s a reach, but perhaps they would agree inorder to avoid the foreclosure costs?
Short sale on a house that is current - Posted by Larry TX
Posted by Larry TX on April 13, 2004 at 08:56:56:
What’s the likely hood of getting a bank to agree to a short sale when the mortgages are current. The husband lost his job and is not finding similiar paying work.
ARV about $150k
First is $100K @ 8.25%
Second is $20K @ 12%
I have not seen the house, but the owner says that no major repairs are needed. The owner wants to move to a cheaper house. I suggested that they refi or contact a realtor. They would rather abandon the house. However, they said that they would work with me on a short sale, even if it took three months. Go figure?
Typically banks here will foreclose after three missed payments and the process takes about two to three months.
Do you think this is “doable” at this time?
Just sell retail - Posted by Carmen
Posted by Carmen on April 13, 2004 at 16:17:51:
Why not just get it under contract (or get the deed in trust) and sell retail? Another investor will just want to get it at $120K also.
If houses are moving fairly quickly in your area, you could have the house sold to a retail buyer, make more money ($21K even if you use a Realtor; $30K if you don’t), and maybe even save the seller’s credit from any blemish. It’s weird, but some sellers just don’t want to worry about the entire “sale” thing or are just so sick of the house they want to walk away … that’s how I get many houses signed into trust, even though the seller could have done the exact same thing I’m doing … so why not step into their shoes and make $20K for your troubles?
Sometimes it is possible to get TOO creative and overlook the obvious.
Re: Short sale on a house that is current - Posted by TheShortSalePro
Posted by TheShortSalePro on April 13, 2004 at 12:22:59:
I think that you don’t have much of a shot here. Not necessarily because the loan payment(s) are current, but due to the perceived equity.
I’ve negotiated shorts while the loan was current… but there wasn’t much (if any) equity. The threat of lender loss was the motivating factor. If there is equity, and the lender’s intel suggests that they will be made whole if the property is foreclosed… they’ll continue with the f/c process knowing that there will be a payday at the end.
Just about everybody gets paid when there is equity.
Re: Short sale on a house that is current - Posted by Randy (SD)
Posted by Randy (SD) on April 13, 2004 at 10:31:57:
I agree with Phil, a short sale is unlikely (even for the second lienholder) there is $30,000 equity in a pretty house-why would any lender first or second except a short sale? Additionally the homeowners are not delinquent, no short sale is possible on a current mortgage. Suppose the homeowners stop making their payments in order to facilitate a short sale, they’re going to ruin their credit and walk away from $30,000 in equity. Why not get it under contract for the $120,000 owed on the first and second (maybe offer them $1000 to work with you) and market the house for $130k/$135k, make yourself $10,000 or $15,000 flipping the deal and move on.
Re: Short sale on a house that is current - Posted by phil fernandez
Posted by phil fernandez on April 13, 2004 at 09:04:26:
Currently the bank appears to be in a strong position. If your ARV of $150,000 is accurate and no repairs are needed according to the owner and the 1st and 2nd total $120,000, the loan to value is at 80%.
And on top of that the owner is current on his payments. With this situation, why would the bank consider a short sale.
Re: Short sale on a house that is current - Posted by Larry TX
Posted by Larry TX on April 13, 2004 at 14:34:19:
I appreciate all the feedback. I was just trying to be “creative” and also to hit that .7 x ARV formula. I’m gonna drop the short sell idea and try to flipp the house to another investor.