OfflineI recently found a lead that is sure to be a shortsale. I talked to the seller tonight and he seems to be very motivated. He told me he tried a loan modification and after was approved the bank changed its mind and he is paying a big amount for the mortgage. The house is located in a good neighborhood in West Palm Beach close to the airport.
The problem I have is that I live in Tampa, FL.
What documents do I need to lock this deal up? I studied about shortsales at the beggining but never was on the field doing them. Any help will be appreciate it. May sell the lead instead of trying to shortsale it.
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Abner6,
I just got done doing the same thing with a short sale but unfortunately it didn't work out. Make sure to do your homework on the property and decide what your game plan will be ahead of time. Determine the fair market value of the home through an appraisal or comps from a real estate agent, and be prepared to wait! Banks are very slow when dealing with shortsales(3-6 months usually)Decide what repairs need to be done if any, and I advise you to continue to look for more deals meanwhile such as wholesaling or bank owned properties which have quick offer responses!
First u need to get permission from the home owner to speak with their bank about their situation. You should double check the term, but I believe you do this with a document called a "Letter of Approval". I believe you can find one on this site. Have the home owner fill it out. (its usually a one page form) This gives you permission to discuss the loan with their bank. I was going to do the short sale process myself, but in my experience, the bank pays for an agent's commission anyways so I just had her deal with it. It helps to be clear to your agent what your intentions are so you can try to maintain control of the property. Otherwise you can just deal with the bank directly yourself. The bank will then send out a "short sale Package" which includes documents for the home owner such as hardship letters, assets, income etc. Make sure to have all of your documents properly submitted and in order because if you don't it becomes a back in forth with the bank,only adding to the time factor. After submission you will make an offer. I suggest putting a deadline in your offer if possible so that banks know you want to hear back by a certain time.
After this step usually the bank sends out for a BPO. Broker's Price Opinion, to get an idea of what they think the house is worth and then the bank typically will counter offer. It is a strategy that requires a lot of patience but if the deal is good enough, then it can pay off. I picked up a house on a short sale for $31k because the other investors backed out. They didn't want to wait.Talk to an agent who specializes in short sales.
Sorry for the novel, hope this helps a little,more questions ask! Good Luck!
Vaughn
Everything comes to him who hustles while he waits.
Thomas A. Edison
Be not the slave of your own past. Plunge into the sublime seas, dive deep and swim far, so you shall come back with self-respect, with new power, with an advanced experience that shall explain and overlook the old.
Ralph Waldo Emerson
If it's a good enough deal and you dont want to wait, get it locked up with a contract (there's examples on the site if you search) and also in the "Forms and Docs" section to the left of the screen.
Then assign the deal over to someone who wants to wait to get a hold of it and it puts a little money in your poacket to move onto something else.
As a side note, I know a few agents that deal in the tampa area with REO's, forcloseures. Send me a PM and I'll forward you their info.
Hope it works out for you.
John 14:6
Abner6,
Hi,
I do short sales and have done them down in Florida. I am in Missouri but we do many in different states. We do also partner with others (JV) if you want.
Myself and my partner have done quite a few of them and are waiting on approval letters from others.
The first thing you will need to get from the homeowner is an Authorization to Release so that you can speak to their lender on their behalf. I am more than willing to help you with the process since we have successfully been closing them.
If you want to know anything else let me know.
Laura Bullock
BMW Investment Properties LLC
www.bmwinvestproperties.com
Hi, Laura:
I would love to receive any help I can from you. I just talked to the homeowner and offer my help even though I have no experience. Your post seem to have come from heaven. Tell me what is the best way to contact you. I am interested in a JV from this deal or an assignment for fast cash , I am not sure what to do but PM me to start conversations.
I will get the paperwork as soon as I can, but I need to know if I need to notarize any of the documents. Or what price do I put in the Purchase and Sales Agreement.
Thank you again
Abner6,
I sent you a PM. Look forward to working together.
So TaketheShot, I get this Shortsale package from the Mortgage company? They actually send it to me or the homeowner? I didn't realize this; I thought I would just have to compile the (unknown) documents myself and send them in.
Any reply is appreciated. Thank you.
I was speaking to a couple today at a garage sale who also have a property they desperately want to short sell. Its in the mountains of CA and is a 5 acre beautiful ranch! I just started my preliminary research (just finished talking to them 1/2 hour ago!) on this site and this is the first thread I've come across, but would love the opportunity for any direction you can give!
They haven't made a payment in a year, the bank picked up their taxes and insurance, and the couple wanted out yesterday, but the bank hasn't even started foreclosure proceedings! I'm going to look in the books to review all the info, but there's nothing quite like hands on experience to guide!
Tammy, pardon my paraphrasing your deal story but only to cut to the chase. First off, get that deal locked up with a contract on it and then have a buyer for it if you cant move on it yourself. Though before you get into anything I would do some searching and see if there's a local area buyer or RE investment group you can pass it off to on assignment if not for yourself.
If it IS for yourself then deal with the bank and maybe ask if you could buy the lien to the property as well and settle with the couple one on one and avoid the more expensive foreclosure process.
John 14:6
Can anyone tell me IF I get the Short Sale package of paperwork from the Mortgage Company, or do I just put together my own 'package' of paperwork and present this to the Mortgage company? I'm kind of confused by this.
ITS WISE TO GET THE PACKET FROM THE LENDER/MORTGAGE CARRIER! MUST HAVE HOMEOWNERS AUTHORIZATION TO CONTACT/COMMUNICATE W/THE LENDER FIRST.
Tomorrow is what you BELIEVE and DO today!
Vaughn,
When submitting the offer, did you have to put an earnest money deposit?