OfflineHelped out the homeowner in a very distressful situation and got the short sale done and closed.
The short sale took about 6 months from start to finish. Got a verbal approval within 4 months but took the lender a couple of months longer to get the approval letter to us. The lender was very slow in the processing of the short sale. Put in an offer and negotiated the offer with the lender which was accepted and then had the agents market it to find an end buyer and got an A-B and B-C transaction done on the property. Walked out of the close with a check.
Homeowner was very happy and lender gets a payoff on the property and we get a property at a discount and sold it below market value.
A win-win-win situation for everyone involved.
__________________
That is great! I would love to hear more details about the property and deal, along with the profit.
Thanks!
-DGadmin
Congrats on that, sounds like you know what you're doing! How many short sales is that for you now?
I deserve success...PERIOD! Reggie Peoples-
how do I find a short sale??? confused?
nice going! how much did you walk away with
Don't Wish the Past, Create the Future! - DH
the spread? Can you run the numbers for us? I am just getting into short sales and I am curious to see the numbers.
Thanks,
KimmyJ
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What are the numbers that way we can learn from it?
Baria
Congrats!! Can you run the numbers and give us details on the property so that we may learn from it. Also if you don't mind to share how much you made at closing on the deal. Thanks
Thank-you everyone for the support and the responses!!!
The deal looked like this.
The homeowner owed: $130,100.00--2 months behind in payments with a true hardship for the family.
Our short sale offer: $76,700.00
After negotiations Net to Lender: $64,478.00
6% commission for our agents: $4,602.00
3% concessions: $2,301.00
plus closing costs.
Left the closing with a net profit to us(the investor) of $9,184.00.
Hope this helps seeing the numbers.
I have been working steady on them for about a year. Along with my partner Donna, we have closed many of them.
Thanks for the comment.
A lot of our short sales come to us by referrals or by our RE agents.
Or you can put an ad out looking for distressed homeowners. Driving your neighborhoods looking for vacant property that a homeowner might have walked away from. Looking on Craigslist with key words like motivated seller, short sale or distressed.
I would like to know if it is typical for it to take so long for the Bank to give you a response? And did the home owner move out before all this happend or were they still in the house until the house was sold? I am trying to help 2 people,one that already walked away and one that is still in the house and would like to stay as long as possiable without paying the mortgage. Thank you....Diane
Diane,
The length of time that a short sale takes will depend on the Bank and their negotiators. Generally they take quite a while. This homeowner did move out before it was done but I have had some families stay until the approval was in place and then they moved out.
Thank-you for your inquiry.
Congratulations and keep up the good work.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Left the closing with a net profit to us(the investor) of $9,184.00.
How did you close, was it a double close?
Did a new homeowner by the property?
I don't understand where your profit came from?
If your short sale offer was 76,700 and net to the lender was 64,478 does that mean you had a buyer at the price of 85,900
Thanks,
Brian
Congratulations! Short sales definitely teach a person patience. Sounds like you are rock-steady and have built (are building) relationships that will just keep bringing you deals. 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
How did you close, was it a double close?
Did a new homeowner by the property?
I don't understand where your profit came from?
If your short sale offer was 76,700 and net to the lender was 64,478 does that mean you had a buyer at the price of 85,900
Thanks,
Brian
Hi Brian,
This was a back to back closing and a new buyer for the property. The accepted amount that the end buyer offered was $87,500. We had a fee for our transactional funding we use to buy the property. We market the property while we are negotiating our offer to the lender. Everything is in the timing. Once you have an approval letter from the lender and you have the end buyer in place then you can close very quickly.
Once your offer of the short sale to the lender is accepted then we sell it under market value to a new end buyer. And this person, the end buyer was a cash buyer also which is always nice.
The original homeowners get to move on with their lives and a settlement on their account and we get a house at a discount and we sell it under market value to a new buyer. A win-win-win for everyone involved.
I hope this explains it for you.
Thank-you!
Rina
Thanks for the support and the great comments!!!! It does help to share and the DG forum is a terrific place to do just that.
Laura
I see
have you tried to assign a short sale yet?
also how did you determine what price to list the house at if you where still in negotiations with the bank
where did you find the transactional funding? was it a company online?
Thanks
Brian
assign a short sale, but you can do a double closing with your end buyer.
KimmyJ
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have you tried to assign a short sale yet?
also how did you determine what price to list the house at if you where still in negotiations with the bank
where did you find the transactional funding? was it a company online?
Thanks
Brian
Hi Brian,
I was not aware that you could assign a short sale. The lender wants a purchase of the property. You need to make an offer and purchase the property yourself. Yes, I have used a couple companies online for the funding of the short sales that I have done. But usually I use a local person I know.
I will usually list the house after checking with my agents and the comps and then I will lower a little at a time to find a "sweet spot" that triggers activity to the property and then usually we get an offer.
You will want to have a back to back closing. A-B and B-C. You will want to make sure that you have two stand alone transactions.
Hope this helps you.
Thanks,
Laura
www.bmwinvestproperties.com
KimmyJ
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You are right. The lender would not agree to those terms of assigning a short sale.
The lenders wants everything as clean as can be with the purchase and the closing.
Quick negotiations brings quick results. Deal well done, congrats. Now on to the next. God Bless.
Sandra
"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.
Congrats. deal well done. this illustrates persistence pays
Great job Laura, over 9k profit from 1 short sale is a very nice deal, and that was after everyone was paid. Keep up the great work!
Jeremy
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
i see
so you get the seller to agree to a short sale, have them sign a contract and make the bank a first offer
then you get comps and lists the house under maket value to get some action on the house using a realtor
then once you get a offer you tell the buyer it is subject to bank approval and work out the numbers (fees and your profit) and then see if the bank take yours adjusted offer
am i understanding this correctly?
what do you tell the seller when you listed the house at a higher price than the contract you had them sign to make the bank your first offer?
Thanks
Brian
Great job Laura!! Thank you so much for sharing this with us. It answered questions I've had about short sales but I was wondering, does the bank write off the difference from the 1st mortgage to the agreed price you paid?
Lisa
so you get the seller to agree to a short sale, have them sign a contract and make the bank a first offer
then you get comps and lists the house under maket value to get some action on the house using a realtor
then once you get a offer you tell the buyer it is subject to bank approval and work out the numbers (fees and your profit) and then see if the bank take yours adjusted offer
am i understanding this correctly?
what do you tell the seller when you listed the house at a higher price than the contract you had them sign to make the bank your first offer?
Thanks
Brian
Brian, what you described is a VERY simplified version. I am currently working on my first short sale deal and they are by far the hardest to maneuver. There is a lot of paperwork involved and I don't mean just from the bank, but paperwork to cover your rear end. In CA, if you even appear to be a foreclosure consultant and you get sued you're toast. You could end up owing the seller 100's of thousands of dollars. New investors who are blindly going out there to do short sales and succeeding are VERY lucky they had a successful outcome. I am not steering you away from the short sale, I am just telling you to research your laws in your state, get with an attorney and make sure you're doing this all the right way. Much of the information can be found by googling your state laws. Please don't go out there, make an offer without having a system and checklist to conduct a short sale. Laws are changing every day and the policies are becoming very harsh to people who break them whether it was intentional or not. My suggestion is to get with a local investor or real estate agent who is successful at doing short sales and talk to them. Let them educate you. Don't forget the seller could have 2nd and 3rd liens, back taxes, etc. You need to know how to find all this out. If they do have junior liens you don't even want to talk to the first lien holder until you know you can get the junior lien holder to reduce or write off the balance. You need to know your numbers, closing costs, etc. An agent can be very helpful if they know you're going to be bringing them the leads. Good luck...
KimmyJ
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It depends on the lender. Sometimes they will take a settlement of an account once we have an agreed price. Sometimes the lender will have the homeowner sign a promissory note for an amount they feel they will need to satisfy the short sale.
It usually states on the Approval letter that we receive from the lender if the short sale will be accepted as a settlement on their account. Or we negotiate the settlement before the approval.
Laura
www.bmwinvestproperties.com
so you get the seller to agree to a short sale, have them sign a contract and make the bank a first offer
then you get comps and lists the house under maket value to get some action on the house using a realtor
then once you get a offer you tell the buyer it is subject to bank approval and work out the numbers (fees and your profit) and then see if the bank take yours adjusted offer
am i understanding this correctly?
what do you tell the seller when you listed the house at a higher price than the contract you had them sign to make the bank your first offer?
Thanks
Brian
Brian,
The seller is aware of what we set the price of the house along with our agents. Then as time goes on we will start to reduce it so we can create activity and that will give us an idea where it will be to get an offer from an end buyer. We determine the offer to the lender through comps from our agents and the property itself.
Laura
www.bmwinvestproperties.com
so you get the seller to agree to a short sale, have them sign a contract and make the bank a first offer
then you get comps and lists the house under maket value to get some action on the house using a realtor
then once you get a offer you tell the buyer it is subject to bank approval and work out the numbers (fees and your profit) and then see if the bank take yours adjusted offer
am i understanding this correctly?
what do you tell the seller when you listed the house at a higher price than the contract you had them sign to make the bank your first offer?
Thanks
Brian
Brian, what you described is a VERY simplified version. I am currently working on my first short sale deal and they are by far the hardest to maneuver. There is a lot of paperwork involved and I don't mean just from the bank, but paperwork to cover your rear end. In CA, if you even appear to be a foreclosure consultant and you get sued you're toast. You could end up owing the seller 100's of thousands of dollars. New investors who are blindly going out there to do short sales and succeeding are VERY lucky they had a successful outcome. I am not steering you away from the short sale, I am just telling you to research your laws in your state, get with an attorney and make sure you're doing this all the right way. Much of the information can be found by googling your state laws. Please don't go out there, make an offer without having a system and checklist to conduct a short sale. Laws are changing every day and the policies are becoming very harsh to people who break them whether it was intentional or not. My suggestion is to get with a local investor or real estate agent who is successful at doing short sales and talk to them. Let them educate you. Don't forget the seller could have 2nd and 3rd liens, back taxes, etc. You need to know how to find all this out. If they do have junior liens you don't even want to talk to the first lien holder until you know you can get the junior lien holder to reduce or write off the balance. You need to know your numbers, closing costs, etc. An agent can be very helpful if they know you're going to be bringing them the leads. Good luck...
KimmyJ
Press on...
www.tagteampropertiesllc.com
Brian & KimmyJ,
Agents, attorney, and negotiators are great to have on your team. Mortgage brokers are helpful also. About working with the junior liens, my experience is that we have had to have the 1st mortgage taken care of for the short sale before the 2nd or 3rd will talk because they are not in a good position to get any money. They want to see the approval letter from the 1st mortgage before they will decide. The first lienholder is the one that wants the short sale paid all to them. It is all in the negotiations but usually we offer a percentage of the balance to the junior lienholders so that they will work with us. For example one short sale that we did the balance of the second was $52,000 and we shorted that to $5000. Not bad. But all lenders and the junior lienholders have to be in agreement.
Short sales are a difficult process but it is truly rewarding when it is all completed. There are so many components to a short sale that it is hard to explain everything so that you will understand. I hope this helps.
Like I have stated before that short sales are not short. Timing is critical.
Laura
www.bmwinvestproperties.com