Real Deal On The Short Sale
I have been reading this forum all day in hopes of gaining some insite into the art of a short sale. I heard SSPRO say that there are alot of wannabe's out there who are tring to short when conditions are not right to short. Can someone please explain? I was considering doing a SS for a guy how has only about $7k of equity in his home, but I dont want to look like a horses behind. It is going to be my 1st deal and I just want to get it right.
Let's look at your scenario. You indicate $7K in equity. How did you arrive at that amount?
What do you think the as-is, fair market value to be? (the basis for any PFSS is the as-is value)
What is the amount owed?
Can the Homeowner demonstrate a financial hardship?
What type of mortgage loan is it?
Are there more than one mortgages?
Any other liens? Is the Homeowner now in bankruptcy?
Does the Homeowner reside in the property?
Is the Homeowner willing to sell simply to avoid foreclosure, will get ZERO proceeds from the sale, and might face tax consequences?
Are YOU ready, willing, and able to purchase this property within 30 days from the mortgagee's approval?
[addsig]
Quote:
On 2004-09-15 19:22, TheShortSalePro wrote:
Let's look at your scenario. You indicate $7K in equity. How did you arrive at that amount?
What do you think the as-is, fair market value to be? (the basis for any PFSS is the as-is value)
$125K is the appraised value
What is the amount owed?
$111K is the payoff amount
Can the Homeowner demonstrate a financial hardship?
He only got to live in the house for 1 week, lost job, couldnt find new job and is not attending school out of the state.
What type of mortgage loan is it?
Covn 15yr fixed
Are there more than one mortgages?
No
Any other liens? Is the Homeowner now in bankruptcy?
Neither
Does the Homeowner reside in the property?
Not anymore
Is the Homeowner willing to sell simply to avoid foreclosure, will get ZERO proceeds from the sale, and might face tax consequences?
Yes
Are YOU ready, willing, and able to purchase this property within 30 days from the mortgagee's approval?
Yes
tazagam
How did you figure the equity to be $7K? :-?
$125K is the appraised value "
Since the property's value is arguably the most critical element of the short sale process....let's look at the presumed value of $125,000.
Why was it prepared (purpose) and who was the Appraiser's Client? Does it list any needed repairs?
In your opinion, as a real estate investor, is the appraisal accurate or are there errors that can be challenged? (I spent some time as a review appraiser for a loss mit department... and found plenty of mistakes)
If the payoff amount is accurate and includes all lender related foreclosure costs... and the FMV is accurate...
In my opinion, based upon the scenario presented, the projected, accepted short will be in the $100,000 to $105,000 range.
The key to successful shorts is to challenge the FMV with factual data, and make your business Proposal as complete and compelling as possible.
By reducing the mortgagee's perception of value... (and that is a function of your own fieldwork) you can influence the settlement downward.
Is the property occupied?
Some mortgagees require that property be owner occupied before they would consider PFCSS.
[addsig]
Quote:
On 2004-09-16 05:40, TheShortSalePro wrote:
Why was it prepared (purpose) and who was the Appraiser's Client? Does it list any needed repairs?
I have an appraiser who does work for me. I send him out to appraise properties that I am intending to pick up.
In your opinion, as a real estate investor, is the appraisal accurate or are there errors that can be challenged? (I spent some time as a review appraiser for a loss mit department... and found plenty of mistakes)
I worked as an underwritter for over 5 years and I do my own appraisal reveiw on everything also. This is an A+ as far as appraisals go.
If the payoff amount is accurate and includes all lender related foreclosure costs... and the FMV is accurate...
I must admit that I am unsure how to calculate the FMV. I am assuming that the FMV and the appraised value would be one and the same. The only repairs that need to be done are some minor cleaning, and having the carpets professionaly cleaned.
The key to successful shorts is to challenge the FMV with factual data, and make your business Proposal as complete and compelling as possible.
I must also admit that I have never put together a proposal for a SS. Any advise in that area would be great.
By reducing the mortgagee's perception of value... (and that is a function of your own fieldwork) you can influence the settlement downward.
Completely unsure of how to do that.
Is the property occupied?
No...he has gone to scholl in another state.
"I must admit that I am unsure how to calculate the FMV. I am assuming that the FMV and the appraised value"
what was the appraisal's 'purpose' 1) to determine as-is, FMV, 2) insurance replacement cost, 3) fire sale value, 4) value after repairs, 5)....
Or did send your guy with the open ended question, "What's it worth?"
Quote:
On 2004-09-16 13:44, TheShortSalePro wrote:
"I must admit that I am unsure how to calculate the FMV. I am assuming that the FMV and the appraised value"
what was the appraisal's 'purpose' 1) to determine as-is, FMV, 2) insurance replacement cost, 3) fire sale value, 4) value after repairs, 5)....
Or did send your guy with the open ended question, "What's it worth?"
Once again the student makes a mistake....That was pretty much what he was sent to do. I asked for the sale value. From now on I will know what to ask for.