How To Save My Second TD
A bit over two years ago at the peak of the RE boom in CA I managed to sell a duplex to a novice investor. I think that he read one of those “No Money Down” books! Anyway the sale price was 525K with me taking back a 100K seller financed note (carry back) and a new first with Wells Fargo for 425K, thus no “skin” in the game. This ill conceived plan (apparently based on the greater fool theory!) was that the buyer would ride the market on up and sell at a great profit with none of his own money in the deal (note payments came out of rents). Neither the NI (novice investor) nor I planned this deal to last this long as I expected to be paid off by now.
Everything was fine until the NI lost his job about five months ago! Well now we are several months behind on mortgage payments and I am really starting to sweat. Here’s the current situation – It looks like the BPO is coming in at about the principal value of the first (425K). The NI is willing to cooperate in a short sale or will just give me the property back if I will reinstate and take over the WF loan. I’m trying to figure out my options and the best course of action.
If the BPO is at or more than the principal value of the first note – what is the bank (WF) likely to do? Will they be open to a SS or figure that they will get all of their money back by selling a REO?
I have to resign myself to the fact that my carry back second is practically worthless but then I’m not so sure that I want to take back the property for essentially full market value.
Any creative ideas out there?
I am not a Realtor but I understood that all all agents were required to submit ALL offers to the seller and let them decide what to do.
I believe you are obligated to submit the offers you have in hand with explanations as to why you and the realtor feel there is no chance for a higher offer.
JS.
>>> I am helping the Realtor with mitigating the short sale on her listing.>>>
Are you doing this out of the goodness of your heart or do you have a position in this?
Submit all and the bank decides.
It is not up to you or the Realtor to make that decision.
Quote:
On 2009-01-25 23:27, LynLinz wrote:
Submit all and the bank decides.
It is not up to you or the Realtor to make that decision.
Wrong. Read your short sale addendum.
Seller chooses the offer to be submitted just like any other transaction. The listing agents fudiciary responsibility is to the seller not the lender.
I am a Realtor. On our purchase agreements there is a clause that states once the seller has accepted the contract the Realtor is under no obligation to keep marketing the property....Unless the seller wished you to do so. When I do short sales I try to get back up offers incase the buyers back out for various reasons. I disclose to others that their offer is back up #1..#2..etc....and only will be presented if the others fall thru...In my area the lenders take so long to do their process that usually the propertry value has deminished by the time they approve the Sale.
Hairman is right, the seller is the owner not the bank. If the seller accepts an offer subject to bank approval of short sale, future offers would be backup offers. Unless thier is language in the contract stating otherwise (language drafted by an attorney...not a Realtor or investor)
Remember the seller/owner controls the property...if they agree to sell to buyer A for 125,000 subject to bank approval then the house is sold. The bank approval is a contingency not unlike a buyers home inspection or financing, etc.
Broker, Michigan