Please Advise...would This Make A Good Short Sale?
Hello....I am a pre-foreclosure and short sale newbie. I am working in partnership with a short sale investor, and I came across this lead. In your opinion, would this make a good short sale? I left lead on my investors voice mail and sent them to him via email and in the meantime, I am waiting to hear from my investor. Please advise.
LISTED WITH REALTOR : No
PROPERTY TYPE : Single Family Home
BEDROOMS : 3
BATHROOMS : 2.5
SQUARE FEET : 2500
OTHER FEATURES : two car garage, deck 9 tenths of an acrear
REPAIR DETAILS : carpet, paint, little repairs in bathrooms
ESTIMATED VALUE : 135000.00
ASKING PRICE : 124000.00
MORTGAGE BALANCE : 109000.00
MONTHLY PAYMENT : 1140.00
ARE PAYMENTS CURRENT : No
LIENS DETAILS : owe 10,000.00 in taxes on house
OTHER DETAILS : time is right now please call as soon as possible
thanks.
SELLING URGENCY : Today
SELLING REASON : dirvorce
man if i could find a house for that price that size around here i would jump on it in a second. How is the REI market out there?
Ryan
ryand
The house is located in Charlotte, NC. The market in that area is hot. i have an investor who is interested in this deal if the homeowner is highly motivated and just want to get the property off his hands to prevent foreclosure or bankruptcy.
Yeah, NC has some lower priced properties from what i hear compared to around here and when i drove through there i remember there being a lot of empty land. Unfortunatly it has no equity as it sits or i would say just take title in a trust and put it on the market.
This is what i am doing as we speak with a property. I am planning on shorting it, but only after i find a buyer. as of now, it is in a trust and on the market waiting for a buyer. Even if i do not short it, i will make some decent money. I guess the short will just be a bonus.
good luck,
Ryan
What do you tell the homeowners Ryan? Im taking your property and if I dont sell it you will lose it in foreclosure and I have no liability. Just wondering how you explain what you are doing to them.
Eric,
Yes, actually this is what i tell them. Every situation is different and for example, I am dealing with one right now where they are divorced and both have restraining orders on each other and i am their only option. They were planning on foreclosing and if there is any chance that i can stop it they want to try. Each of them doesnt want the other to to profit and would rather me make the money.
Yes, you tell them that there is still a possibility that they can foreclose and you make them sign a disclosure that says so. You should try to pic up Kallers course where he explains it in more detail.
Ryan[ Edited by ryand on Date 04/03/2005 ]
Dude I have Kallers course I was just curious....haha I was just wondering what you told them
And for what its worth, Ill consider you a guru if you want...
haha, no that is okay. I am the furthest thing from a guru.
I usually just explain to them that i will will give them X amount to deed it into a trust and i will take care of it from them but there is always a small chance that it could still foreclose. I let them know that i am a middle man and i will go ahead and list the property. It helped that i was a salesman for 4 years also.
Ryan
SSP how will they know? My attorney said that he will have to make it so i actually buy the prop from myself so they only see the buying HUD. He said he can structure it so they wont even know. Can you explain what you mean?
P.S. How can it implode if you find a buyer and pay the lender the payoff that they are asking? Even if the short isnt accepted i am still making a lot of money at the standing payoff amount.
Ryan[ Edited by ryand on Date 04/03/2005 ]
Increasingly, standard preforeclosure short sale acceptance language must be signed by the mortgagor(s) and included as part of the HUD1 controlled transaction.
The mortgagors must state that they have not conveyed an interest in the property prior to the preforeclosure sale.
If they convey a deed... to you, to me, to a trust... and deny it... they have lied. This is a material omission on a HUD1 controlled transaction... also called fraud.
If you encourage/recommend that they lie about it... for your gain... you are complicit.
Will you get caught? Probably not. But why risk it?
Thanks SSP,
One other thing, The Loss Mit Rep already gave me a verbal that he will accept a short about a month ago. He has already seen all of the paperwork etc. The only thing i have not gotten from him is the estopple letter. The property was deeded into trust after all of this (last week). Does everything you stated still comply? I am just curious because my attorney said this would be fine.
Thanks for all of your help,
Ryan
fair enough, thanks for the advice.
P.S. They do not normally take property through strict foreclosure around here. It will usually go to auction like any other state.
Ryan
I would ask the Owner to have their broker provide a CMA to justify the asking price...
DSecide what you want to Offer....
Then go into contract with the Seller being sure to include all the restrictve clauses usually required in a preforeclosure short sale transaction (the agent should know... but may be learning and not know what is required)