BiggerPockets

What is the ave down pymt?

Down pymt for a short sale. I will be using private money to execute a back to back closing, but I don't was 6500 locked up in escrow. I want to renegotiate my down pymt and wanted some suggestions.

This will be my first short sale....I do not have money in escrow, but lender agent advising to place 3% down for bank yo consider offer. I was told that private lenders offering transactional funding do not provide funds for down pymt....enlighten me! I'd rather not have to use a HML for the down pymt and private money for cash closing, but it is what it is.

alright JW.
I could tell you haven't done short sales before,so let me school ya just a tad bit to help ya out.

First things first, why are you buying a short sale?
are you buying it for yourself or to flip it to an end buyer (simo-close).

how come I get the feeling there is a listing agent involved trying to tell you how to buy a short sale?
if he/she is not understanding what you intend to do (which I assume is to paper flip it to an end buyer) then you need to explain it to him/her

Also don't ever put money down, Thats retarded!! if your going to pay cash at closing(or the equivalent PM/HM/Your own cash) simply provide a POF(proof of funds) letter

Also you better have your end buyer in placed and ready to go or else you better be ready to fork out the money and keep it.

I could go and on and spell it all out step by step, but has what I said so far made sense?

PS your obviously dealing with an agent that has no idea what they are doing dealing with investors :roll:

don't put any money down, if my post didn't make any sense let me know I don't mind going into detail for ya, just excuse me, I get a little worked up sometimes when I start blabbing on and on and on

You're confusing down payment with the earnest money. You'll almost always have to put up an earnest money check on an offer that's made through agents. Sounds like that the case here. If you're dealing directly with an individual, you may be able to get away with a small earnest money. But, I've never had that work with a deal with agents.

If you're going to wholesale this, then have your buyer give you that same amount (or more) of earnest money.

Jon, Thats typically true with traditional sales, but I've never put a dollar down. I also refuse to let agents do my short sales, so that may have something to do with it.

Even considering that, my best bird dogs are realtors and they'll get the listing and I'll put in offer and work the short sale my self while they're looking for an end buyer.

I just can't get past putting any money down for a deposit or earnest money. I've got 57 deals I'm working right now, can you imagine keeping track of all that money if I put 1k on each of them

J W
I am a broker that does a lot of this type of work and the advice about no down is right on point. Short sales can go on for a long time and all of my contracts say no deposit, no time periods to run, no obligation at all until the bank signs off on the deal in writing.

You would do well to get your money back and run because Nick spelled it out in very precise terms.
Many agents think they know what they are doing , they might even be real nice people but this is a game where the banks move the goal posts all the time.
My cash buyers put up POF (proof of funds) and we tie that property up for the price of one blank contract for as long as the bank wants to play dumb.
The negotiator I use is one of the best. I trained her and now she runs circles around me. Nobody gets paid until the deal is done, that's how you keep loan people and real estate people interested in your goals. Remember to tell them clearly what you want at the start. Anybody who doesn't get it.. just move on.

Remember it is a good idea to learn short sales and the rules of the road because it is a better deal for everybody involved, it is easier to get everyone's cooperation. The icing on the cake is the new legislation at the federal level and also individual state laws that are making it very unpleasant for the banks to continue to build REO inventory. In California cities can now fine REO properties 1,000/day per code violation for unsafe and substandard houses.
I am working with private and public entities here to implement the compliance procedures and the lenders handling our local properties are becoming very cooperative.

Thanks Nick and Jon.

Nick, I plan on wholesaling to another investor substantially under FMV. I would love to just assign the contract, but since it's bank controlled that's not an option unless I offered with an LLC and then sold the rights, but executing a double close is a bit more clear to me. I like your attitude Nick and I was firm at first, but since this is my first short sale, I lost my posture...I need some of your attitude ASAP! So should I have my attorney write up the offer less the down since it's cash even though I know my agent will have a hissy:) I have access to the mls so I find my own properties and make offers through my agent who provides me with access to the mls...he has a great attitude since he is kinda new to the business, but yuo can tell when he is being fed old school agent silliness....I have told him that investors work on a totally different mentality and he is very open, which is great, but believe me I have had to stand ground many times already, but got soft with this one. I needed someone like yo to get me back on track. what do you suggest? Offer with no down and call it a day?

Thanks so much Will and Nick! You just saved me a huge headache! I am going to do as you said and offer zero down pymt since I def do not like smoke being blown u know where, nor do I like to be bullied! Do you suggest, I pay to get property inspected or hold off? I like the idea of no obligation till the bank signs off, so in the meantime, I can market the property and as Nick suggested advise it's subject to short sale approval, right? I know conceptually how a short sale is executed, but need to school myself on the details....