Short Sales

Short Sales

I have been checking into the short sale type of investment. It is a general rule that the bank has to approve the final offer. Is it true that it takes generally two to three monhs to get a sale closed. From the time you make an offer to close?

__________________

Ali


Little Information

Reggie wrote:
If I couldn't find a buyer for my short sale deal what would be the best way to get out of the house and not worry about monthly payments? I heard of some called "deed in leu" and "cash for keys." Can you explain how would either of those work and if there is any other way out?

A deed in Lieu is when the homeowner gives the property back to the bank.

Cash for keys is a marketing idea created by investors. It is a way to market to get the property. This generally involves the homeowner deeding the property to you.

If you explain more about your particular transaction we might be able to help you further.

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


but how

but, how can we do it?

close w/ llc and assign it to end buyer?

please help me on this


Why not just wait for the property to go into foreclosure?

I just went through a long short sale process. It was very very annoying. It was almost like the lenders bank didn't care at all about getting rid of the property before it went into foreclosure.

We offered the full asking price and after 4 months the lenders bank finally accepted the offer. During the 4 months we paid for an inspection and an appraisal totaling $700. Our lawyers fees were $500 and we had to put $1000 down when we signed the contract. So, we had $2200 into the deal BEFORE it was even accepted by the lender. That was incredibly foolish now that I look back on it.

After taking their sweet a$$ time accepting our offer, they then told us we had only 14 days to close on the deal or it was null and void! 14 days?!

We rushed around like chickens with our heads cut off trying to get the financing situated. Our mortgage broker was involved throughout the entire 4 month process and promised us she could close in a short amount of time once the contract was accepted. Well, she couldn't. After 4 months of BULLSH*T, the deal fell apart because our idiot mortgage broker couldn't close the loan in 2 weeks.

What a waste of time and money. I'm still trying to get my $1000 deposit back from the sellers attorney. The $1200 of my hard earned cash that I paid for the appraisal, inspection and lawyer was basically flushed down the toilet. $1200 gone.

I'm actually happy now because I'm almost certain it will go into foreclosure. I hope to buy it at auction for far far less than I would have paid in a short sale.

My views now on short sales is ... why bother? Just wait for it to go into foreclosure and buy it that way. Just bid no more than what you would have offered for the property in the short sale. The chances are great that you'll buy it for less at foreclosure.

I'll be steering clear of short sales from now on.


Short Sale Trouble

I must say I have to agree with you. I have had 4 short sale deals go south on me in the last few months. Thankfully I didnt loose any money though- really sorry that happened to you. But my frustration level is at an all time high because I can taste success in real estate but just cant get my hands on my next deal. This market is very puzzling to me. I am stepping out of my comfort zone and going 2 hours from here on the Jersey Shore into Pa. this weekend to scout. Have Sat & Sun set up with 2 different realtors, seeing 8 properties each day. Hopefully I will find my new niche! So hang in there - take your experience as lesson learned and keep on keepin on!


laura

How did 4 short sales go south without you spending/losing any money?

If you got close to completing even one, you'd at least have needed to pay for an appraisal for your mortgage company right?

You didn't get an inspection on any of the 4 properties or use a lawyer?

Maybe they're "going south" because you're not following proper channels?


Hey, Laura.

laurajohnson wrote:
I must say I have to agree with you. I have had 4 short sale deals go south on me in the last few months. Thankfully I didnt loose any money though- really sorry that happened to you. But my frustration level is at an all time high because I can taste success in real estate but just cant get my hands on my next deal. This market is very puzzling to me. I am stepping out of my comfort zone and going 2 hours from here on the Jersey Shore into Pa. this weekend to scout. Have Sat & Sun set up with 2 different realtors, seeing 8 properties each day. Hopefully I will find my new niche! So hang in there - take your experience as lesson learned and keep on keepin on!

Good luck on the scouting! It'll be fun.

Question on the short sales: I don't know if you posted somewhere about them, but, did you have the whole experience of working with the sellers and the bank and all the paperwork that goes with it, or were they "listed" short sales already in process? The reason I ask is I think I "fell into" my first short sale today. Cheater-style, that is. New listing, on the market just 2 days. Came across my e-mail yesterday. Looked at it today and made an offer. My realtor called me later and said it could take awhile to hear back because first the seller had to accept and then Countrywide had to approve. Was in foreclosure process. Sounds like a short sale to me. Eye-wink Anyway, I'm looking forward to learning about the process without having to deal with one head-on. Will be good practice. I'd like to hear more details of your experience (if it's not too painful. lol).
And thanks, d0n, for posting yours. That stinks, but yeah, chalk it up to experience I guess.

Thanks,
Rina

__________________

"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)

"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11

For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249


dOn & Rina

Mine were also 'listed' short sales. Both my realtor and the listing realtor are experienced so I know paperwork was done properly. I looked at the properties, prepared and submitted my offer with documentation of needed repairs, etc. justifying my low offer, along with pre-approval letter from my mortgage rep, and good faith deposit. All of them took a long time for any response, but finally I got a verbal acceptance from the bank through the listing realtors on each of them. It was at this point, once a signed contract was received by me, where I would have been ready to get the needed appraisal. I do not engage my lawyer until there is a signed contract ready for review. All the houses were 'as is' so the only inspections done were by me and my fiance/handyman. However, before paperwork was received by me to lock up the deal, cash buyers came in and, of course, cash is king, so I was dropped out of the deal like a hot potato. Dont know if the bank was using my offer to wheel and deal or if its just bad luck (3 were with the same bank). But as it stood the only loss I suffered was that of time and the emotional roller coaster of anticipating, waiting, celebrating and then crashing. But I admit I will not give up on them, because more and more are appearing on the market here everyday, and they do hold the potential for being a really great deal. One other comment, dOn, in my offers we had closing dates set - just like any other offer. This could prevent the trouble you had if you ever chose to do another one. Hope this answers your questions......
(oh - had to reschedule my scouting trip to next weekend due to a snow storm!!
I'll let you know what kind of luck I have!)


Thanks, Laura.

Thank you for writing that out. I see why you felt a little frustrated. Good thing you DON'T give up easily. Eye-wink
I was talking to my investors today, and they said that the majority of short sales are put together by agents that specialize, for the most part, in such kinds of listings, and that banks are very reluctant to deal with individual buyers. That makes sense. Anyway, it will be interesting to see how it goes.

Enjoy your snowstorm. Smiling Cuddle up with some hot chocolate and a good DG book this weekend, and let us know how the scouting goes next week.

Love ya,

Rina

__________________

"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)

"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11

For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249


Short Sales

Looks like my area is difficult to start investing without doing short sales.
Prices are holding in the mid threes even for places that need work and the taxes are all 11k to 15k making it very difficult to pay expenses through rents. So short sales appear to be the answer.
I researched a 1/2 dozen distressed homes that are all vacant but they were purchased at peak in 05 and 06

How do I find short sales?
Should I go to an agency and tell them I'm looking for short sales because prices haven't come down and nothing is selling?

Also I know of an out of work agent driving a school bus because the market is dead.
Would it better to use a guy like this who is now hungry for the $$ and who has access to the same info an agency has?


short sales

d0n wrote:
I just went through a long short sale process. It was very very annoying. It was almost like the lenders bank didn't care at all about getting rid of the property before it went into foreclosure.

We offered the full asking price and after 4 months the lenders bank finally accepted the offer. During the 4 months we paid for an inspection and an appraisal totaling $700. Our lawyers fees were $500 and we had to put $1000 down when we signed the contract. So, we had $2200 into the deal BEFORE it was even accepted by the lender. That was incredibly foolish now that I look back on it.

After taking their sweet a$$ time accepting our offer, they then told us we had only 14 days to close on the deal or it was null and void! 14 days?!

We rushed around like chickens with our heads cut off trying to get the financing situated. Our mortgage broker was involved throughout the entire 4 month process and promised us she could close in a short amount of time once the contract was accepted. Well, she couldn't. After 4 months of BULLSH*T, the deal fell apart because our idiot mortgage broker couldn't close the loan in 2 weeks.

What a waste of time and money. I'm still trying to get my $1000 deposit back from the sellers attorney. The $1200 of my hard earned cash that I paid for the appraisal, inspection and lawyer was basically flushed down the toilet. $1200 gone.

I'm actually happy now because I'm almost certain it will go into foreclosure. I hope to buy it at auction for far far less than I would have paid in a short sale.

My views now on short sales is ... why bother? Just wait for it to go into foreclosure and buy it that way. Just bid no more than what you would have offered for the property in the short sale. The chances are great that you'll buy it for less at foreclosure.

I'll be steering clear of short sales from now on.

I have A LOT of comments here.

1) In this day and age, 2 weeks is NOT a lot of time to close a loan- even if all your paperwork is already in.

2) Yes, the banks are stupid. There is also another issue. Often, the banks do NOT have go/no go authority. That rests with the investors. The banks are merely servicers. They first have to FIND the investors (which oddly enough often seems to be a problem) then get THEIR approval before they can short.

3) So yes.. short sales are often a huge waste of time. If I were going to purse them at all, I would have at least half a dozen in the hopper at one time. And would be prepared to waste A LOT of time and see a bunch go down the drain.

4) I am VERY surprised that the bank took a hard line about the 14 days as long as you could show good faith progess toward closing. Neither of my REOs closed on time (due to the fault of the bank's title company) and the bank waived late closing penalties (at my insistence).


short sale

I was involved in a short sale last August. I stepped into it by accident. My realtor had shown me a lakefront property that was listed way below assessed value and the house was empty. (the assessed value was 550k) The house had great potential. I looked up the owner and went to his house to discuss the property with him. He owed $350k on the property, and the bank had a cash offer of 300k, from another investor. I offered $315k, with some contingencies, and, of course, I would be financing the deal. I did, however, have a prequal letter to verify funds.
The bank took the cash offer in November. I'm kicking myself for not going 10-15k higher.


Cash is King!

This of course makes it even more difficult for those of us just starting out and without alot of liquid funds....but NEVER give up! There are deals out there for all of us and we just have to keep at it!


Short Sales and Assigning a Contract

I was successful finding my first short sale. When signing the papers for the bank I had to agree not to assign the contract. What! I can't assign! A friend
who is also a mortgage broker and owner of a title company who I thought would be handling the closing. Said NO PROBLEM...We just have a two way closing. Big mistake.. In the small print of the banks contract read, they select who the title company is. I was successful in finding a investor that was willing to pay a 8% locator fee and pay cash for the property but he was from out of town and wanted to use his title co....You can see wear this is going....I had to pull out of the deal at the last minute using a inspection clause. Four months and a locator fee gone...OK, I learned from that but How do you get around a NO ASSIGNMENT CLAUSE of a banks contract as a locator dealing with
a out of town investor? As a locator, it seems as though short sales are off
limits.


Help! Short Sale question

Can someone help me? We put in a full price offer on a short sale because it is a smokin' deal and the owners (who are agents) countered back and said they have multiple offers over asking price and for us to counter back with our highest offer! Can they do that? If they have it listed at one price and have had multiple offers, then shouldn't they have just excepted the highest offer? Also if we decide to counter back do we need to state in the counter that we plan on selling the property to our end buyer? I did not state that on the original offer but ready through the forums it sounds like I may need to do that or is that just if you are assigning?

Niki


How best to structure a short sale deal to wholesale?

Hi,

I have been reading all the great postings for quite awhile now. I am in NYC, and with my advertising in Craigslist I was connected with a lead for a short sale deal in Brooklyn. I have been working on building my buyers list at the same time, so I would prefer to wholesale it to one of them.

The real estate agent has had the property listed for over a year on the MLS, he has already had a lot of discussion with the bank, and says they are motivated. The numbers are 239k on the MLS listing, he feels the bank may go down to 160K. I still need to do my repair estimate, though the broker is telling me it is about 20K, and he estimates it will be worth about 300K when done.

My main concern is that I need to put it under contract, and I am trying to determine the best way to do it with the proper disclosures that I let the bank know that I may be looking to resell the property to another buyer. I will be able to provide a prequal letter.

Any help on whether it makes a difference whether to do a purchase contract or an option to purchase contract, and how best to disclose to all parties that I may resell this property. I want to make sure I put it under contract correctly, before I have anyone take a look at it to give me rehab numbers.

Thanks,
Jeff


Okay!!

Would short sale can also mean "out with old mortgage in with new mortgage"? What ever the amount the property was bought for by the owner, during the pre-forecloser deal it will be thrown out of the window and the new offer from the investor or buyer would be considered? What say you?

Thanks


pre-forclosure doc.

I am trying to find pre-foreclosure doc. like authorization to release, option contract for sale and purchase, notice of option,affidavit of understanding, three day notice, and listing agreement forms so I can start doing short sales. I want to be able to walk some through myself. May have contact about house as soon as n. o. d. is filed.

Thanks


Short Sale Process.

Marvin,

Did you use any forms or instructions from Dean's book? If so, which ones? I am basically trying to do the same thing. What technique should I use to make money on this type of transaction?

Regards,

Ben


I have

I have a few short sales I would like to place offers on. I want to put offers on these now, being that I know that it can take a while. In the mean time while waiting for positive responses from the bank, I will be seeking other deals I can assign. But my plan for these short sales is to do a double closing. I plan to use a hard money loan to close with the first transaction between myself and bank. I will have my end buyer lined up close with him right after first closing. Get my portion,pay the hardmoney lender back right away. I will only need hardmoney lenders money for about a hour. Also on the contract I plan to put(vesting TBD at closing) after my name in place of and/or assigns. I underdtand this is the wording to use. But I dont think I would have to use this wording if the property would be bought all cash. Then I can sell right away to someone else. I understand that I must put in the contract that I will be allowed to sell the home right after I take ownership. But all necessary wording will be used to cover all ends anyhow. Let me know what you guys think of this way of doing things.As far as shortsales go.

__________________

I got my mind made up.....

www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


I have

I have a few short sales I would like to place offers on. I want to put offers on these now, being that I know that it can take a while. In the mean time while waiting for positive responses from the bank, I will be seeking other deals I can assign. But my plan for these short sales is to do a double closing. I plan to use a hard money loan to close with the first transaction between myself and bank. I will have my end buyer lined up close with him right after first closing. Get my portion,pay the hardmoney lender back right away. I will only need hardmoney lenders money for about a hour. Also on the contract I plan to put(vesting TBD at closing) after my name in place of and/or assigns. I underdtand this is the wording to use. But I dont think I would have to use this wording if the property would be bought all cash. Then I can sell right away to someone else. I understand that I must put in the contract that I will be allowed to sell the home right after I take ownership. But all necessary wording will be used to cover all ends anyhow. Let me know what you guys think of this way of doing things.As far as shortsales go.

__________________

I got my mind made up.....

www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


I have

I have a few short sales I would like to place offers on. I want to put offers on these now, being that I know that it can take a while. In the mean time while waiting for positive responses from the bank, I will be seeking other deals I can assign. But my plan for these short sales is to do a double closing. I plan to use a hard money loan to close with the first transaction between myself and bank. I will have my end buyer lined up close with him right after first closing. Get my portion,pay the hardmoney lender back right away. I will only need hardmoney lenders money for about a hour. Also on the contract I plan to put(vesting TBD at closing) after my name in place of and/or assigns. I underdtand this is the wording to use. But I dont think I would have to use this wording if the property would be bought all cash. Then I can sell right away to someone else. I understand that I must put in the contract that I will be allowed to sell the home right after I take ownership. But all necessary wording will be used to cover all ends anyhow. Let me know what you guys think of this way of doing things.As far as shortsales go.

__________________

I got my mind made up.....

www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)


I just saw my first property REO

I just saw a reo property. It was my first time going out after reading both deans books. i just joined deans investment group just yesterday. I made two appointments to look at properties yesterday. I just came back from the house. It is worth $179,900 it is a mulifamily. The zestimate on the house is $390,000. i was told by the agent that I can put in a low offer because it has been on the market for a while as long as it is not in the $10000 range. When she told me that it blew my mind I took her name and said please send me more properties at my email address she told me no problem. I really do not know what i am doing as of yet because this all new to me but I am getting a rush just trying it out. i love all the advice thats out there. I just want to know what offer should I put in for it i really do not know as of yet.


It is always refreshing.

It is always refreshing to find Realtors that want you to make low offers. What is to note here for those that are starting new to this business is that there really are Realtors that are worth working with. Sometimes that are easy to find other times they take a little effort.

They can be worth their weight in gold.

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


Question on assigning a contract on a short sale

I just negotiated a short sale and I am looking to assign my contract, however I am not sure how this will work with the bank. The bank is willing to accept $85k and I want to sell my contract for $50k bringing the total sale to $135k. I am not sure how this works with taxes and everything. Please help!! I have 30 days to close.


Question on assigning a contract on a short sale

I just negotiated a short sale and I am looking to assign my contract, however I am not sure how this will work with the bank. The bank is willing to accept $85k and I want to sell my contract for $50k bringing the total sale to $135k. I am not sure how this works with taxes and everything. Please help!! I have 30 days to close.


schiofalo

Sorry if this question is too basic, but, do you already have someone you are assigning it to? Do you already have a purchase agreement signed by the bank? In it did you add and/or assigns (assignees) to your name or include an assignment addendum? What was the banks view on this?

If you assign the contract, you are not responsible for any fees or costs associated with closing. If you are reffering to income taxes on the $50K you will make, you should probably ask your CPA about that.

btw, Congrats on the short-sale negotiation!! That's an accomplishment in itself. thank you for sharing.

Rina

__________________

"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)

"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11

For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249


Question

I am new at this, please bear with me... Should I receive a lead from a seller wanting out, and after doing my due dilligence I find he/she are upside down,
do I walk away or maybe try a short sale?
Appreciate any advies/tks.
Also looking for a mentor or soneone I could call as I
move forward...


Schiofalo

schiofalo wrote:
I just negotiated a short sale and I am looking to assign my contract, however I am not sure how this will work with the bank. The bank is willing to accept $85k and I want to sell my contract for $50k bringing the total sale to $135k. I am not sure how this works with taxes and everything. Please help!! I have 30 days to close.

Congrats!

Great questions. I am not the expert on here compared to many REI's on here, but I found that short sale and/or REO managers will call the contract void if you try to assign the property. This is disclosed in the short sale approval letter.

Loop hole: Add a secondary buyer. Simply create an addendum to the purchase agreement stating "Add second buyer John Doe". This is your end buyer. You can either collect your fee upfront from the end buyer. Or do a dual closing.

In addition, depending on the format of the short sale approval letter...sometimes, it specifies the actual purchase price, and sometimes it only specifies their required minimum net proceed. If purchase price is specified, then you cannot sell the for $135K, this would have to be approved. And if approved lender will take that $50K profit that you will make. Again, this is specified in the short sale approval letter. If you are in the buying side, ask the listing agent for a copy of it.

2 suggestions to make your $$$:

1) Add secondary buyer to the contract, and collect your fee upfront from your end buyer. This will allow your second buyer to close escrow under their name alone.

2) Close escrow at $85K under your name, and do a dual closing with you being the seller selling the property to your end buyer for $135K. You will need a good escrow officer for this one. Oh and if you are in the state of CA(my specialty), don't forget about the 3 1/3 transfer tax fee that is deducted out of your profit.

I hope I helped rather make it confusing.

And yes, I agree with Rina...check with your CPA about your tax on profit.

__________________

"If you think what you've always thought, you'll do what you've always done. And if you do what you've always done, you'll get what you've always got" [Napoleon Hill]


I know a short sale is a

I know a short sale is a house that has more owed than what the house is worth, or that has negative equity.

Can anyone give me a STEP by STEP Example on how to negotiate a short sale deal?

__________________

"Whenever you find yourself on the side of the majority it is time to pause and reflect."
-Mark Twain


Short sale

How you doing Bailey.

I live in VA and I just put in a offer and the realtor says that 1000 check has to be put in escrow. Now do I have to put my own money in the escrow or can I get an investor before it goes through and sign him up as the second buyer. What if I don't want the investor knowing because He might take my house before I get it under contract? Anyway I am bidding way under 50% below FMV and I probably at 60% and I hope it gets approved. There is a lot of ugly things I saw in the house like broke windows carpet stains, holes in walls, unfinished basement, messy walls, and it just need a good cleaning and paint and new carpet.

__________________

"Work hard Play Harder"