Short sale details
Hey everyone,
Here is my question. In short-saling a bank on a mortage, let's say it's a $100k property with the owner having $95k to pay back... if I short sale them down to, say, $60k, what is the bank's incentive to sell to me? Do I need that $60k upfront, even in the mortgage stays in the original homeowner's name? How would I proceed once the amount has been agreed upon?
This is a good question. Let me add to it if I may.
How long does the average bank give a person to come up with the funds for a short sale?
Is it possible to double close or assign at the short sale closing?
Here is my question. In short-saling a bank on a mortage, let's say it's a $100k property with the owner having $95k to pay back... if I short sale them down to, say, $60k, what is the bank's incentive to sell to me?
The purpose of a short sale is to get the bank to discount the mortgage based on a short sale proposal you send to them showing them why they should short sale the mortgage. If the property is in badly need of repairs and has little equity, then it is a good candidate for a short sale.
Do I need that $60k upfront, even in the mortgage stays in the original homeowner's name?
Yes. The bank has to know that you are serious about purchasing the property so that they will get their money. When asking for an extension date to close, the bank may want to see the money before they agree.
How would I proceed once the amount has been agreed upon?
If you have to ask this question, then you are not ready to do a short sale. You may want to read more posts and maybe invest in a course here on TCI. They have very reasonable rates with detailed information.
How long does the average bank give a person to come up with the funds for a short sale?
Depends on the bank, but you should have your financing lined up ahead of time. In short saling, you usually have to get the deal done before the foreclosure auction. Sometimes you will need to close in 3 days or less.
Is it possible to double close or assign at the short sale closing?
It is possible to do it, but it most likely will not happen. Lenders don't short sale to give you time to find another investor to assign it to. The lenders want to secure their money if you are going to purchase it before the foreclosure auction. The reason they short sale is because there is a chance that they won't get as much as they want through the auction and will accept a discounted mortgage if it guarantees they will get something out of the deal instead of nothing.
If you guys are considering getting into short sales, then I suggest you read a lot more on the topic. Not every pre-foreclosure can be short saled!
Tanya[ Edited by tanya1215 on Date 03/10/2003 ]