First Short Sale
Our neighbor is in foreclosure w/ a house in very bad shape. We'd like to do a short sale but, I have a few questions... please bear with me.
Mortgage - $121,000
Back taxes - $4,000
Judgement - $5,000
Repairs - $18,000 (this est. would be w/ us doing the repairs. prob. at least 30k for prof. est.)
Approx. MV after repairs - $175,000
#1 - Assuming everything else is acceptable, ie. the owner hardships , etc., etc., Would these #'s justify getting a short sale from the bank?
#2 - They received a letter from the bank's attorney stating that the debt is $132,000. Does this amount usually include the taxes & judgements? Or, do you think that there are that many extra late charges, etc.? Possibly it includes the attorney fees?
#3 - When submitting the short sale package to the bank, is it better to have professional estimates done? Or, since we're doing the work ourselves, will our estimates be sufficient?
#4 - When there is a short sale, can the seller get any money out of it? Or, do they just get the ability to not have a foreclosure on their record. Because, I would prefer if they were able to get at least a little money out of it. They really are nice people....just unlucky.
Thank you!!!! I truly appreciate all of the knowledge so many of you have in these forums.
gmkezell,
#1 - Assuming everything else is acceptable, ie. the owner hardships , etc., etc., Would these #'s justify getting a short sale from the bank?
In my opinion, I do not think this is a good short sale candidate. The bank will see equity in the house and will most likely reject the short sale unless you can convince them the home is worth less than it really is through really low comps, really high repairs costs, etc.
#2 - They received a letter from the bank's attorney stating that the debt is $132,000. Does this amount usually include the taxes & judgements? Or, do you think that there are that many extra late charges, etc.? Possibly it includes the attorney fees?
The letter they received from the bank's attorney will usually show the payoff balance, which should include all the extra fees/costs. You should read through the document and it will state whether the attorney's fees are included in the total amount due.
#3 - When submitting the short sale package to the bank, is it better to have professional estimates done? Or, since we're doing the work ourselves, will our estimates be sufficient?
You should have expensive professional estimates included in your short sale proposal. You have to give them a reason to accept the short sale.
#4 - When there is a short sale, can the seller get any money out of it? Or, do they just get the ability to not have a foreclosure on their record. Because, I would prefer if they were able to get at least a little money out of it. They really are nice people....just unlucky.
When doing a short sale, the lender wants to see that the seller gets nothing from the deal. So, the settlement statement that the title company shows the lender should have the "Cash back to Seller" as $0. That doesn't mean you cannot give them some cash under the table, as long as they know they would not have received anything otherwise.
One last note, you may have to pay the back taxes seperate from the mortgage loan payoff. Make sure you know what you are getting into before purchasing it.
Tanya
Thank you! I appreciate!!!