The New Girl
Hi this is my first time doing a short sale. I am a realtor a fairly new realtor. I have a client that has a mortgage of 149k and a 2nd 6k the property will not sell for what she owes. Will she be a good canidate for a ss? Property is in pretty bad shape and her husband has lost his job. She wants it to foreclose.
Sounds like a jewel in the rough. I believe the payments have to be late by three months before the lender will consider a SS. Get the most expensive contractor to estimate the repairs. You want to make the house appear to be worth much less than what's owed.
Thank you for a quick response. I have a few questions on the ss process. Let me explain a little. I plan to list the home on the market stating ss upon bank approval. Can I do that? And say the first is discounted can I get the second to be discounted too? Sorry just a little confused. But I have all the confidence in the world. I will make this work.
not enough info. first and 2nd amount to 155k whats fair market value, what condition is it in, ect...kenmax
The fair market value is around 125k the property is in really bad condition. They have tried to fix it up but I think they just made it worse. I figure just off the top of my head it going to need about 10k to 12k to get it back in shape.
I find that FMV is irrelevant to a shortsale mortgagee. however, it is the basis for your first determination of a shortsale candidate. Once this has been solidified, it is the as-is value where you need to start. I would order a low BPO (if theres ever such a thing) and submit with your proposal. FMV will work fine for your own built-in profit spread. As you and i know there are deeper ramifications to a foreclosure, I would let the homeowner know this as well. Find out if this is the FHA or conventional or private loan/lender, as this will direct your next move. I would work backwards on the shorts, starting with the 2nd-getting confirmation then move on up to the first..good luck
regards-pat
1st and 2nd equals 155k. m/v is 125k, 12k repairs for a difference of 43k. you will need to discount of 43k to break even not counting legal fees. what are your plans for this house. buy/hold, flip, ect.....hows the weather in den. i'm taking a trip around august to den and surrounding areas. mountain climbing the "fourtenner and some change." i luv it, but its hard on this tn. groundhawg {elevation 250ft. above sea level.} but i do get to climb the "baby" great smokey mtns. {6700 ft.] i climbed mtn. shasta in ca. {14,220+-} "solid ice". it liked to "killed" me.......kenmax
ANGELINE --
QUOTE FROM ONE OF YOUR POSTING:
"Let me explain a little. I plan to list the home on the market stating ss [short sale] upon bank approval. Can I do that?"
You stated you are a new realtor. After obtaining different opinions from the website forum ... you should talk to your real estate office manager or broker.
You should obtain the approval from your real estate office first before writing a listing entering in MLS regarding the short sale so you do not misrepresent the loan and possibility that the lender will discount.
Kenmax the wheather is great!! Its been perfect this last week for mountain climbing. There some rain in the forcast though. Denver is a Great place to visit the Rocky Mtn. are beautiful. My client want to list her property but it not worth what she owes so Im going to try to negotiate with the bank for a ss. If not she is willing to let it go into foreclosure. Her husband lost his job and she will soon be going through a divorce. They want out. I have a fellow realtor who has done a ss before in a situation like this. Im just trying to cover all the angles.
Angeline,
Please ask those around you in the office and most important look at the area, is it steady, is it slowing, going up or down.
This sounds a little iffy for one of your early transactions. I would do the standards for awhile. Then line up your entities for future plays. The idea that she wants to go into foreclosure is a spooky. I know divorces are strange, all of mine wer simple just took money. But proceed with great caution. I do not see enough money in this one to make it worth your while. But check the office, ask the Broker, that is what he is there for.
Lucius a Broker for sob sob, 50 years. An investor in Real Estate for 60 years. Is Morey Junior High School still there, feeds to East Denver High. I was there for one year. Interesting, provocative even in the 20's
i agree with lucius. that 's what i hinting around with the the profit spread. div. can git very www.crazy.i know i just finished one. emotions take place of reason. don't let your eagerness take the place of your reason. good luck........kenmax
If you are planning to buy the property yourself, don't be afraid to offer 1/2 of the principal balance to the first & maybe 2-3% to the 2nd. That is, if the property is in such need of repair that a conventional lender will not loan on it.
There is clearly a hardship involved.
I highly recommend the ShortSalePro's Short Sale Primer to help you get started. You can check out other postings in this forum to find out how to access his products.
NWMS - thanks for the plug. PM me with your mailing address and I'll send you a complimentary 30 page booklet "SSP's Glossary" for your review and comment.
I agree with nwms. Your offer needs to be low. Preferably 40% to 50% of the mortgage balance, or fair market value whichever is less. If you aren't embarrassed to make the offer it is too high.