better chance of short sell with bank finance???
I had never heard of short selling until joining this forum. Please let me know if I have the basics correct. You find a motivated seller who signs to say you can approach bank to take on their debt. You make an offer to the bank to settle the debt by sending in details, photos comps etc. If accepted you sort out the financing and the house is yours.
If I have the basics correct please pass any experience you can on the following questions:
1. What is the lowest % of the debt you can offer the bank without insulting them?
2. Are the bank more likely to accept your offer if you ask them to finance the deal. ie: take out mortgage with them.
3. If they finance the deal what is the lowest % downpayment I should offer and is it normal to ask for a favourable interest rate.
4. Does anyone know if short selling can be done in Canada?
Any information you can post will help me out. Obviously if I have the basics wrong to begin with please correct me. Thanks
Sidwyn,
Hello again! I think you may be slightly confused with short sales. Either that or I didn't quite understand your interpretation of it. Here is a short summary of how short sales work:
1. Find a motivated seller.
2. Get the seller to sign a release form so that you can speak to the lender about their mortgage.
3. Ask the lender if they are willing to take a discount on the mortgage. They will probably send you a short sale package for you to fill out and send back to them.
4. Have the seller sign a contract for an amount you are willing to pay the bank. (i.e. If the seller owes $95K on a home worth $100K, then write up a contract for $60K).
5. Take bad pictures, get comps, etc.
6. Fill out short sale package with all the information the lender requests and send it in with the offer to purchase, pictures, comps, etc.
7. Wait for the lender's answer.
You will have to seek financing from another lender. The only reason this lender will accept the short sale is if they know they will be guaranteed money than if it went to auction. I don't know if it works in Canada. You should check out Dwan and Sharon's articles on Short sales. You can do that by clicking on "Articles" and then "Article Topics" and then "Short Selling."
Tanya
Thanks once again Tanya. Have checked out the articles as you suggested. Things much clearer now.
I think I will look into short selling when I reach Canada. If it's possible to do it, do you recommend purchasing Dwan & Sharons short selling Package??
Dwan and Sharon are the experts on short sales. I have heard that they taught the other real estate gurus about short selling, like Ron LeGrand. They have a detailed course on the subject.
Tanya