Posted by Tim Fierro (Tacoma, WA) on February 24, 2003 at 13:36:58:
Stacy,
By finesse, do you meen negotiation skills; or is there something that can make a short sale difficult that I am not thinking of?
Short Sale Package… - Posted by Mike
Posted by Mike on February 24, 2003 at 05:51:43:
Hello,
I am putting together my first short sale deal today. I have experience in wholesale (assigned 10 or more last year) and am anxious to do my first short sale. My question is what docs will I need to send to a lender to get the deal approved?
-Mike
Re: Short Sale Package… - Posted by MoniqueUSA
Posted by MoniqueUSA on February 24, 2003 at 05:59:26:
You’ll need fewer documents if it is a junior lienholder than if it is the 1st lienholder.
Some of the documents will include:
- Your offer
- Purchase Agreement
- HUD1
- Financial Statement
- Hardship Letter
- Comps
- Photos
MoniqueUSA
Re: Short Sale Package… - Posted by Mike
Posted by Mike on February 24, 2003 at 06:10:55:
Isn?t My offer and Purchase Agreement the same thing? If not what is the difference? Also, what do you mean by HUD1? Financial Statement? Is that a letter saying the money is there in my bank account or that I am pre-approved for an amount? Specifically what should a hardship letter say? Thanks for your response.
-Mike
Re: Short Sale Package… - Posted by MoniqueUSA
Posted by MoniqueUSA on February 24, 2003 at 06:27:12:
Your Purchase Agreement is with the Seller. Your offer is to the bank … how much you they will get in the short sale. If it’s a junior mortgage, these numbers will be entirely different.
A HUD1 is the Settlement Statement for the closing.
The financial statement is for the SELLER’s finances, not yours – to prove that the seller cannot afford the house or to pay the difference between the amount you are offering and the true mortgage balance.
The hardship letter should say what happened, why they can’t afford the house, the payments, etc.
Mike, short sales require some finesse. You can probably learn how to do them through posts here, but it won’t be easy. A good course will cut down your learning curve immensely. Dwan Bent and Sharon Higginbotham have a short sale course available here on this site. I haven’t seen it, but this is one and there are others available.
MoniqueUSA
Re: Short Sale Package…What ‘finesse’? - Posted by Tim Fierro (Tacoma, WA)
Posted by Tim Fierro (Tacoma, WA) on February 24, 2003 at 09:34:58:
Monique,
I know there are courses that are out that can show someone, possibly from start to finish, on how to do a short sale; but I am wondering what the ‘finesse’ is in doing these. Can you explain a little about this?
The reason I ask is that I had never done a short sale before, but had a client a couple of months ago who was in a situation where I suggested a short sale. I got an authorization letter to release mortgage information; created the letter myself. I then called, and faxed, the letter to the lender. Then talked to a rep there to have a short sale ‘package’ sent to the seller. Seller filled out the paperwork, I filled out things they didn’t know and helped out with the paperwork, sent it all back to the loss mitigation dept, etc… From there it was all a matter of phone calls and structuring a price that was acceptable to the lender and finding an interested buyer at near that price.
While it has taken 2 months to actually complete, I didn’t find no ‘finesse’ in the situation other than just talking to different people at the lender during each stage of the transaction. I think a total of 3 different people have been involved from the lender’s side. The BPO was an ordeal since nobody had a key, but it eventually got done. Paperwork took a couple of extra days because the seller wasn’t sure what the ramifications of this would be and were concerned.
I have to say, as far as structure or paperwork that was needed and the amount of skill (or lack of) that is needed to complete a short sale; I think almost anyone could do this without a course.
You say requires finesse, but right after also suggest that others could probably do a short sell based on information found in posts here. I agree with that and also agree that most courses that are sold will help someone’s learning curve; it just seems that if this first short sale is any indication, a short sale is all about cooperation amongst the players. The lenders already have the paperwork in place, and if some lender does not, the paperwork actually needed is very small.
Re: Short Sale Package… - Posted by Mike
Posted by Mike on February 24, 2003 at 06:46:38:
Thanks for your response. Have you done very many short sales? Where are you from? I’m in OHIO. I have seen Dwain and Sharon speak in conference a few times. They are nice lady’s.
-Mike
Re: Short Sale Package…What ‘finesse’? - Posted by MoniqueUSA
Posted by MoniqueUSA on February 24, 2003 at 11:11:09:
Tim,
For mortgage balances that are higher than what the property is worth, you are right. No finese is needed, particularly if the discount is small.
But if the discount is large (50 cents on the dollar, or even less) or if the house is not upside down, we’ve found other levers must be pulled … such as helping the lender to see that the value of the property is less than what they thought, for example. Or, that the repairs are significant. Bottom line, providing helpful input to their decision process.
MoniqueUSA
Re: You’re right, Monique. - Posted by Stacy (AZ)
Posted by Stacy (AZ) on February 24, 2003 at 11:29:28:
Hi Monique…hope all is well with you.
Yes, I just wanted to chime-in and agree with you that it takes some “talent” and/or “experience” to finesse difficult short sales so they end-up where the investor would like. I want to also add “persistence”. Wow, my last one took about five months.
Hang-in there!
Re: You’re right, Monique. - Posted by MoniqueUSA
Posted by MoniqueUSA on February 25, 2003 at 09:53:59:
Hey there, Stacy!
Are you attending the Convention this year?
Hope to see you there!
MoniqueUSA