short sales
I need some help in the process of a short sale. Here's the scenerio.
Home is valued at $225,000. I was in negotiations and had come to a final offer of $205,000.00. I also had an inspection done which revealed the home needs at least 20,000 in repairs. Homeowners had divorced, and long story short, one of them refused to come to closing, so the homeowners are in foreclosure. Homeowners owed home equity loan of $20,000, and mortgage of 180,000.00. Bank foreclosed on homeowner, and now the amount owed is only listed as 180,000.00. There is a firm handling the loan on behalf of the bank.
How do I present an offer to the firm handling the loan?? Any suggestions would be helpful, I am in the process of trying to get further info.....thanks everyone!
Are you trying to short sale or buy it at the price of $180,000? I'm not quite sure I understand the situation and/or you may be confused about short selling.
A short sale is when a lender agrees to accept less than what is owed. This is what I understand from the post, please correct me if I'm wrong. The home is worth $225K (FMV). You negotiated a price with (the sellers or bank???) for $205,000.
When you stated, "Bank foreclosed on homeowner, and now the amount owed is only listed as 180,000.00" I think you mean that the 1st leinholder is foreclosing for $180,000. If this is true, then you can ask the 2nd if they would accept say $5,000 for payment. Then you would pay $185,000 for a home worth $225,000. Does this work for you number wise??? After everything is paid, then you'd only net $20,000. The only other thing is to try to short sale the 1st, but they may not allow it since they see equity in the home. Good luck and decide whether you want to pursue this or not.
Tanya
Tanya,
I re--read my post, and apologize for the confusion. Before the homeowner went into foreclosure, his house was on the market. I made and had offer accepted of 205,000.00. He didn't come to closing due to ex. Deal fell through.
Now, homeowner is foreclosed, and may be filing bankruptcy. A law firm is now handling the loan for the bank. I would like to short sale the property. From what you're saying, the bank may not accept less than the 180,000 owed on the loan because of the equity in the property. That could be true. But if I offer, and they reject, would they still entertain another counter offer, or is it all done when they reject?
This home would become my residence, so making money on it is not the issue, but getting it for a reasonable price is, due to the repairs that need to be done. Think this is a reasonable plan, or too much money for the amount of repairs owed? Thanks
Well, that makes it different if it's going to be your primary residence. You can see if the lender will entertain a short sale. Ask them if they'd be willing to take a discount? If yes, they will probably send you a short sale package to fill out and return to them. The seller may need to fill out certain parts of it, so let him know what you plan to do with the property concerning the short sale.
When the lender rejects your offer, then you can counter with another offer. That's how you negotiate a reasonable offer. You should start low because you can always offer more, but you can't offer less than the initial offer. You will also need a copy of the realtor listing, showing that the seller did attempt to sell the home. Get a contractor (expensive one) to give you estimates of the damages, to include with your short sale proposal. You'd be amazed at some of the offers investors get from short selling. I think Dwan or Sharon said it best when they said, "whatever you think is a reasonable offer to short sale, offer less." Good luck.
Tanya