Short Sale Process?
I am doing a Short Sale with a seller who's file has been handed over to the foreclosure dept at Countrywide and have never done one before. We signed a contract and now Countrywide is asking for all kinds of stuff from her to prove hardship and that we will be speaking with a "negotiator" soon. I want to make sure that our agreed price is not going to be "negotiatedr" right out the door. Can someone please let me know what the common steps are in a Short Sale so neither me nor the seller are taken advantage of by the lender.
thanks!
Processing2001..I think if you scan the "Foreclosure Forum" you'll find some answers.
You mentioned "agreed price will not be negotiated out the door" ..my question for you is, "what agreed price"? The one between you and the seller? mcldavid
the seller wanted to sell the house to avoid foreclosure. we got on the phone with countrywide and told them we wanted to do a short sale. they asked what the sales price was and i said 100k. countrywide said that was too low so i said 120k and they said send over a purchase contract. then they also want the seller to prove hardship with paystubs, bank stmts, etc and that we will be assigned a negotiator. so i am concerned that the negotiator will want to negotiate a higher price than 120k.
please help
Any offer you make should be predicated upon the property's confirmed, as-is, fair market value.
Suggest that you read "Prequalify a Short Sale Candidate" and "Childs' Play" two essays available on TCI.
For a Short Sell, the agreed upon price is between you and the lender. Your seller does not have a voice in determining what the sells price will be. Many people get the seller to sign a blank purchase contract so that you can change your price as you negotiate with the lender. You have to send in a hardship letter and a sales contract as a minimum. Any other documentation you can provide to help support your case (seller has no funds) works in your favor.
What is the fair market value (FMV) of the house after repairs are made?
What is the estimated cost of repairs?
What is the principle balanace to the lender.
Is there only one lien on the property?
"For a Short Sell, the agreed upon price is between you and the lender. Your seller does not have a voice in determining what the sells price will be"
As to the mechanics of the proposed transaction, the offer and acceptance between buyer and seller is subject to mortgagee short sale approval.
If the mortgagee rejects the offer due to the anticipated net recovery (most common reason for rejection) they can force the parties to renegotiate a greater sales price, or, a more favorable distribution of proceeds.
The Seller must approve the final terms, contingencies, and /or conditions as indicated on mortgagee short sale approval letter. The Seller may or may not agree with those terms so they do have a voice in the matter.
the appraised value is $177k
there are no repairs needed
the principal balance is $128
so far the payoff is up to $169 with all the interest and tack on fees.
this is a great investment!!
please send all the advise you can give!!
Try to denigrate the mortgagee's perception of the property's as-is, fair market value. Use that value as the basis for your Proposal.
Try to estimate the mortgagee's projected costs to force the property to sale, hold, insure, and remarket.
Not only must the Mortgagee have the authority to grant a short sale request, the mortgagor must qualify for that relief.
Above all, your Proposal must be factual and compelling.
ShortSalespro,
I purchased your E- book and found it to be quite helpful. However:
You stated:
"Try to estimate the mortgagee's projected costs to force the property to sale, hold, insure, and remarket. "
What is the best and most accurate way to estimate the lenders foreclosure costs?
Please be specific.
Thank you.
I'm glad you found it helpful.
Why not ask the loss mit rep in one of your earliest information sharing discussions? "So, how much do you think your Company will spend on legals, and other costs if the Borrowers drag their heels and throw up every conceivable roadblock to fight this foreclosure?"
The first step in estimating anticipated costs is to prepare a forecosure time line... how long CAN the process take... including ROR, bankruptcies, post sale bankruptcies, acquisition, marketing, and liquidation. What costs do you think the former mortgagee will incur during that time period?
I don't recall if the E-Book
covers the Cost Benefit Analysis, and/or Time Value of Money.
First off, start with getting the deed.
Then you need to go thru a short sale
course to understand the dynamics.
The shortsalepro has a good product
on this site that would be helpful.
Most important, the final Hud-1 should
not show any money going back to the
seller.
Good Luck
Jeffrey Adam
[addsig]
You know i really don't see that the owner will not question the new buyer making alot of money on their misfortune
I understand that the owner must be motivated, but when they find out how much less the bank will take and what the buyer will receive, how do you find that these owners react?