Suggestions On Taking The Next Step???
HELP !!!
I'm not really sure what I'm doing, but at least I'm in motion. Long story short. I've got an agreement with an absentee owner who's vacant home is in the foreclosure process. It seems as though the lender really doesn't want to foreclose on this one. I've just received a "Letter of Authorization" from the owner to deal directly with the lender regarding a "Short Sale".
My Question is: Exactly how do I approach the lender on the first phone call. The owner has talked with them previously and asked them if they were "Open" to a short sale and they said they were and sent the owner a "Short Sale Package".
The lender told the owner to have a prospective buyer deal directly with the owner because he still owned it until they actually foreclosed on it. I've done that and have an accepted offer from the owner, and now his permission and "letter of authorization" to deal directly with the lender.
I've never done a "Short Sale" before and don't really know what the best way to approach the lender is.
Any suggestions would be GREATLY appreciated.
PS: If "ShortSalePro" reads this, I would REALLY like to talk to you regarding this. I had previously PM'd you but I haven't really had a response from you. I just purchased your "Short Sale Primer" but it hasn't arrived yet. Please check my profile to see how to contact me.
Thanks in advance for any assistance you can provide. 
[addsig]
hey dude
well sounds like your on the right track. you wanna call up the bank and tell them that you have a signed release authorization contract from the owner, they'll have you fax over that contract and they'll make a note of it that they can talk to you. they will then transfer you over to another dept where all you gotta ask is,"hi, my name is..., and i wanted to know if you would entertain a short sale?" the CSR will either say,"i'm not the person to talk to, let me transfer you." or "yes, i will get the package sent over to you right away, how would you like that? fax, snail mail???" or in some rare cases, "no."
this is my experience so far with short sales, of course i've only done one and going on another soon, so i'm not at all that experienced. still learning. the hardest part is just trying to get your seller to organize all the paperwork you need to complete the short... dont forget to send in your offer to them as well. they'll list everything that they need from either you or the seller. they also ask to see if you have a realtor you can list the property with once you take ownership of the property... hopefully you have contacts that will let you list it with them for a cheap commission unless you jus plan on them selling the house for you.
well i hope that helps, i'm not a pro of any kind but i've done it once... kinda... hehehe well take care and happy investing.
[addsig]
Thanks for you help and congratulations on your first successful "Short Sale".
[addsig]
You should receive the Primer shortly. Carefully examine the mortgagee's short sale request application, and begin assembling the information that the require before a decision will be made.
You'll also want to begin to prepare your Proposal that will accompany the mortgagee's boilerplate application.
The reason why you'll want to include an accompanying proposal is simply that the Proposal will speak for you. As the application is being reviewed by the empowered body (usually a team of loss mit reps) you won't be there to answer questions, or to present/emphasize the benefits... so the Proposal will have to do that for you. The Proposal will anticipate their questions/concerns, and provide all the information that they would need to render a favorable decision.
Another opportunity to learn.
I just got a call from the owner. Evidently when I faxed the lender the "Letter of Authroization" to communicate with them on the owners behalf, They called the owner and said "Before they would entertain any offers, the property has to be listed with a Realtor. So the owner has gone ahead and done that.
My question is how does that effect My Previously accepted "Offer to Purchase"? The owner said he informed the Realtor about me and the accepted offer.
[addsig]
If you have an accepted offer that was signed by the seller your offer can't be ignored. It is legal. If the seller never signed the offer then it isn't valid. If I were you I'd be calling the Realtor tomorrow morning. I think that is the first step. Find out how much the Realtor knows about the situation and then go from there.
Hi RE4MeIn2003,
I respectfully disagree with the above post. If you made an offer for a discounted amount, it probably was contingent upon the acceptance of the short sale from the lender. If the lender requires that it be listed for a specific amount of time before they will consider a short sale, then you dont have any other options. Have him list it.
Even if your discounted offer did not have that contigency in it, and you both signed it, if they guy is in foreclosure, this means that he doesnt have any money. So how would you force the issue that he signed the contract for the discounted amount and you demand that he close? In order to close, either the bank would have to agree to the short sale, or the owner bring thousands of dollars to the closing table to pay off the remainder of the mortgage.(with the money that he doesnt have).
In short sales, "Offer to Purchase" are simply a preliminary item, they change constantly do to negotiations with the bank. In a situation like this, you dont break things down into "Contract Law", you break things down into "Common Sense"!
Have hime go ahead and list the house for the required time, and start working on another one. If the house sells on the market in the mean time, then good for the seller, and be happy for him. If it doesn't then you can begin negotiations with the lender again!
Best of Success!
BAMZ
BAMZ
Thanks for your reply. I've read a number of your responses to other posts over the past couple of weeks and have come to respect your knowledge and experience.
Yes. the offer was made "contingent" upon negotiating an acceptable Short Sale agreement with the lender. Do you feel it would be of any benefit to still follow up with the lender and attempt to show them the advantage of an All Cash, Quick Close sale to get this "Problem Loan" for them off of their books. Just for the record, the payments have NOT been made on this loan in about two and a half years. YES you read that correct. About 30 months. It seems like they really DON'T want to foreclose on this loan because they realize they can't really win that way and it is just going to cost them more time and money. Do you have an efficient way to convince them of that?
[addsig]
An enlightened and respected real estate broker will be your friend and ally in these scenarios.
The broker (or broker's agent) should be fully apprised, then list the property for sale at it's as-is, fair market value. The restrictive and protective language incorporated into the listing agreement, and the subsequent Contract For Sale that I use meets 99.9% of mortgagee's requirements.
Work with the broker... and you'll learn (as a team) to capture and close short sale referrals from your market area..
I work with referral brokers from across the USA, acting as a liaison between the Seller, the Purchaser, and the foreclosing mortgagee. If you need specific help, or an introduction to an enlightened broker willing to participate PM me. If your scenario makes sense, I'll help move it forward.[ Edited by TheShortSalePro on Date 12/04/2003 ]
Hi RE4MeIn2003,
Thank you for your kind response.
You could certainly continue to follow up with the lender ever few weeks to let them know that you are still interested, and the house STILL isnt selling. However, it sounds like there are more hands on this loan than just them. In fact, they may just be the servicer. So in order to protect their investment, they have to follow the requirements of who owns the mortgage.
Another option:
Based on comparable sale, there may already be equity in the house if you buy it as is. I haven't heard the numbers on the property from you, but you might consider this. Also if you determine that this is an option, you may call the lender and ask if they will take accept a payoff of the principle balance only (not arreas)!
If not, you can wait out the required list time from the bank, and then go back and start working it again. Try to work as many of these at a time as you can!
Best of Success!
BAMZ
[addsig]
Hopefully, the seller has an agent who knows how to deal with distressed properties. That's a lot of hope.
Anyway, the agent should help facilitated this short sale. The property will have to be exposed to the marketplace for a resonable amount of time before the lender will entertain an offer from you.
There may not be a whole lot of equity here after being in arrears for 30 month with late charges, legal fees, impound shortages, foreclosure expenses,and other advances.