Posted by Dell Webb on March 11, 2006 at 17:28:51:
THAT’S THE DIRTY SECRET OF SHORT SALES. THEY DO NOT WORK EVEN 50-PERCENT OF THE TIME!!! Read that again, and again and again. I don’t give a damm what the “experts” like Kaller claim, cuz they KNOW better. If they have a 50% success rate it’s because they cherry pick ONLY those short sales with banks their mitigators have relationships with or worked with. I have used his mitigators, and a LOT of deals get rejected because his mitigators don’t have a buddy or insider to work with.
The gurus (and I hate these hucksters) want everybody to buy their courses. They can’t be honest about the fact that foreclosures don’t work in a great majority of the contracts you get (unless you’re really cherry picking deals with huge seconds) because then, no one would buy their courses to find out you can’t really quit your job in 90 days and continue to eat (and make YOUR mortgage payments) without having a rich daddy or some such thing.
One of the people in my area of Michigan-Ohio sells a short sale course and bootcamps. BUT, he recently confided to a friend of mine that he and his wife hadn’t done a short sale in some time…the next weekend however, guess what? They were putting on a boot camp on the subject of short sales and raking in the money. SEE WHERE I’M GOING HERE?
What do you guys do when you have a short sale that the bank won’t discount? Do you just let the seller know, hey sorry, can’t help you and move on to the next one? Wish them luck over the next couple of months as the sherriff sale looms?
Posted by TNinvestor on March 09, 2006 at 15:56:08:
If anyone does short sales that way they should be run out of the business, gives all investors a bad name. I do short sales when there are no other options available, they are going to lose their home no matter what. Most every case I’ve delt with they owe more than the house is worth, most of the time more than the original loan ammount. I always tell them up front that short sales are a long shot, successful only 50% of the time and some lenders are more receptive than others. We arn’t all vultures Jim. We treat people the way we’d want to be treated if we found ourselves in their situation.
I wasn’t saying that anyone was a “Vulture”, TN. I was simply asking a question. Obviously a short sale is going to work best and be the best option when there is no equity and no other option. I was simply wondering what you let the seller know when it doesn’t work. As you say yourself, they are only succesful 50% of the time, so do you just tell them, sorry couldn’t help and you’re still losing your home?
“I would guess nationwide, the probabilities are less than 5%.”
You may be right. My success rate over the past 20+ years is closer to 65% - 75%. Why? Because I’m selective in what scenarios I decide have short sale feasibility.
Too many johnies-come-lately, fresh from a seminar, or bootcamp, think every situation is a short sale candidate. They’re not. They’ll make ridiculous, unsupported offers and hope they strike it rich.
Request for preforeclosure short sale consideration should be a comprehensive, factual, business proposal.
I’d guess that 95% of them are not. That bodes poorly for the distressed homeowner who has placed their trust (or misplaced their trust) in the short sale facilitator.
Posted by Brian (UT) on March 09, 2006 at 23:52:00:
Jim
He answered your question. He said he covers it up front, where it should be covered. The sellers need to know the probability of the deal going through. So depending on market conditions, the particular lender, and a dozen other factors the odds could range from zero to whatever percent.
Secondly, if you sign them up you should always have constant communication with the sellers, telling them you have nothing to report if that is the case, or something you did if that’s the case. The sellers will be kept up to date and if it falls apart they will not be hearing it out of the blue.
Posted by Equity Hunter on March 10, 2006 at 17:34:44:
I’m real glad you mentioned that 95% of short sales won’t work. I’ve been saying that for years and few believed. Thanks. Or… are you trying to say that you know the “inside” secrets? WE WANT TO KNOW NOW!
We’ll pay anything!
Short Sales do work… I’ve been doing them for 20+ years… long before they became fashionable or pitched by seminararians.
But, as stated, they are only applicable in certain circumstances… There is no secret… except careful prequalification, due digence, and professionalism.
That’s not much to hang a hat on. - Posted by Equity Hunter
Posted by Equity Hunter on March 11, 2006 at 07:21:27:
“… careful prequalification, due digence, and professionalism.” That’s a given. But lets not get carried away. When it comes down to it the lender is looking out for their bottom line. It is a numbers game. Give them the right number and they will approve.
On another more interesting point… If you read between the lines you are saying that even if you are sucessful 65-75% of the time you will still be doing them for 20+ years. That tells me they are not the path to financial independence many make them out to be.
It’s enough for me. And you are right. They’re twice the work for half the pay. But that doesn’t negate their success, or applicability in a given situation.