short sales listed with an agent 13 posts by 10 users

Posted: 03/25/2008 at 01:24AM

Most banks require that the property be listed on the market before they consider selling short. They want to see an honest effort to sell the home first...then if no offers received the price gets dropped and eventually gets to the point where it is in short sale.

Just because the home is listed with an agent doesn't mean you can't negotiate the sale. The seller can call the bank and give you authorization to negotiate your offer once it is submitted without giving you authorization to look at all their financial info that they have to submit in a short sale package.

Just be sure to do due diligence before calling the agent to write an offer...if you know more than they do they will be more apt to work with you, and could help in persuading the seller to let you negotiate. The agents don't want to do a ton of work when they aren't going to get paid any more commission. In fact, they will get paid less when the bank dictates 5% instead of 6%.

Posted: 03/25/2008 at 01:14PM

Heathen said:

There are some tricks to negotiating a 'short sale' (found throughout these forums); but for the most part, it is a normal offer like any other offer.

I have been combing through this forum for the last couple of weeks. I would love to hear any tricks to negotiating a short sale. Mitchnfreed has been very helpful to me up to this point.

Posted: 04/07/2008 at 05:18PM

Loki,

Consider your area vs. mine before you state what is true and what isn't.

Different markets call for different procedures. Portland's market is not as bad as most. Therefore, banks want to see homes on the RMLS, with a listing history before they consider a short sale. Believe me, I have quite a few going right now....and if you look at the FSBO lists vs. the RMLS listings tagged for short sales...you will see, in the histories, that the homes start out well above what they owe and eventually drop to the short sale point...and then they list as a short sale in the RMLS.

I agree that you can do a short sale without listing on the RMLS...I said MOST banks require it.

I am confused how a bank would step in and offer to sell the property...banks don't sell properties unless they own them in REO. They would prefer the homeowner cure the default and have a performing note then selling short.

Plus, in Oregon, any home in short sale can accept multiple offers. Therefore, the bank can hold out for higher offers even though the seller has already signed off on one. Short sales here are a pain.

Furthermore...deficiency JUDGMENTS are for Judicial Foreclosures and only occur when the homeowner is foreclosed on via the court system and not trustee's sale. Then again, these laws depend on the state.

When a short sale occurs there is no judgment against the borrower...if the lender sells short they may require the homeowner to sign a " Promissory Note" for the difference...if the homeowner refuses, then the lender can kill the deal.

Posted: 04/24/2008 at 04:28PM

You can definitely get a release form from the homeowner and no there would be no breach of contract.

All you really want to do is have the authorization to speak to the bank about your offer and send them your short sale package info. This can actually be accomplished with a simple fax stating that you have authorization to request information regarding xxxxxx loan at xxxxxxxx property on behalf of xxxxxxxxxx borrower. I would make sure the fax contains the borrowers name, property address, mailing address, loan number, and last four digits of their SSN.

You may have to send this form in 3 plus times before the loss mitigation dept receives it...but it will get there eventually.

Usually the homeowners are more comfortable just giving the agent the authorization...so if you can win over the agent and convince him/her that with the authorization, you can take a lot of the work off their plate...then they may go to the homeowner and get the authorization signed for you.

Posted: 06/16/2008 at 02:43PM

Christian,

I don't believe your comments are entirely true.

The was a federal act passed in DEC 2007 the lenders cannot hit you with a default judgement on your primary residence keep in mind the irs can and will tax you on the spread in a short sale and one morning you will wake up to a 1099 in your mail box

On the contrary, House Resolution 3648 prevents home owners from being taxed on forgiven debt. Obviously, there are some constraints, such as primary residence, no cash out refi's, etc...

Since I am so new to biggerpockets, I'm not allowed to put a link in the post. However, if I did, I would put in a link to the HR 3648 fact sheet which clearly states this.

I'm not trying to be anal, I just think it's important for investors and agents to be well versed when dealing with these matters.

thanks,

dave

Posted: 06/23/2008 at 11:27AM

How would go you about having an end buyer first before negotiating a short sale? Would you create a buyer's list first of rehabbers, retail buyers, and such before even considering it?

If so, would you share how you would go about it?

Michael