SANITY CHECK on short sale PLEASE!!
Would you mind taking a look at these numbers and telling me if I'm in the ball park for a short sale:
Analysis on Aden Creek
Probable Asking Price $98,000 (based on comps)
Negotiations $4,900 (5%)
Commission on sale $5,586 (6% realtor fees)
4 months to frclse/sell $2,400.00 @ $600/mo P&I
Fixes $2,000 (weak guestimate)
Depreciation $2,587.20 @ .66%/mo (value dropped 7% last year)
Interest not earned on $$ $1,500 (figure their money is tied up in this non performing loan)
Legal Fees $1,500 (guess for filing, foreclosure, etc…)
$$ Bank would get after sale: $77,526.80
Rough estimate is that owner owes the lender $85K. My initial thought would be to offer $60K and expect to agree on around $65-68K. Are there other factors to take off the bottom line that would work in my favor?
Thanks,
Joe
Joe,
Banks are "penalized" for having a non-preforming asset/note on their books. This "penalty" is in the form of not allowing them to loan out 8X the amount of the defaulted note! Use THIS AMOUNT to calculate the lost interest!
Don't forget to add marketing costs, insurance for X months, and property taxes for X months.
Your plan looks good. Tweak it up a little bit and you should be successful. Also, I've heard that its not a bad idea to include a deadline date for accepting your offer.
HTH.
[addsig]
Looks like you've got the right idea, Joe. Don't forget that it is the Seller who must qualify for short sale consideration, too. They must demonstrate a financial hardship, and an inability to cure the default. They must fully comply with the mortgagee's application process, and it is the Seller who must make the request for short sale consideration.
When you make your presentation to the lender, make certain that they'll be able to quickly identify each component in support of your argument. You've got to establish the as-is, FMV.