Short Sales on MLS can those work?

I realize that working directly with a motivated seller on a short sale is probably what most people would recommend. But I can't help but wonder about all these short sales I see advertised all over the MLS & internet by real estate agents. I mean 2 advantages I see right off the bat is 1.) the seller already agreed to a short sale and 2.) a lot of the paperwork and negotiations should've already been completed or at least further along than if you started from scratch. Now of course I'm making assumptions that things are being done correctly, that the agent knows what they're doing, etc, etc.

So has anyone approached investing into short sales this way as opposed to starting the short sale process from the beginning dealing directly with the homeowner? I think from a leverage & best use of your time standpoint you could in theory reduce a lot of the short sale process time-frame by getting in after so much work has already been completed. Plus you could spend more time looking through these pending short sales and less time marketing directly to homeowners. Seems like a win-win in my opinion.

So what am I missing? What would it take to make this work? And my exit strategy is double close to retail buyer.

Thanks.
Moeskii

Edited: 06/26/2010 at 08:05AM

Mark Brian

Real Estate Agent · Anderson, South Carolina

313 posts
2065 Influence
6 Awards

Icon_minipost Apr 30 '09, 01:10 AM

It could work. Anything is possible. A seller that is motivated and an agent that has experience with short sales are a must.

I would just add it to your arsenal. Do not rely on only one method to get deals. If it seems to work then do more of them, but don't forget about what has worked for you in the past.

Edited: 06/26/2010 at 08:05AM

Scott Bastarache

Real Estate Investor

30 posts
48 Influence

Icon_minipost Apr 30 '09, 02:08 AM

Moeskii,

Just make sure you inquire wether or not the bank is going along with the short sale. I looked at a 2 fam the other day that was listed on MLS and the listing agent told me that the bank holding the mortgage was not easy to work with and wasn't happy at all about working toward a short sale. It appreared from the lack of cooperation that the bank was going to take the foreclosure appraoch.

There is no reason to waste your time looking at and placing an offer on a short sale if the bank won't even consider it.

Scott

Edited: 06/26/2010 at 08:05AM

Account Closed

4 posts
-8 Influence

Icon_minipost Apr 30 '09, 02:19 AM

Mark, thanks for the reply. Yeah, absolutely I would continue to market directly to homeowners as I have in the past. I was just trying to determine if anyone has approached short sales this way; because my experience has been that listings on the MLS is obviously seen by more people, which means more competition & makes me wonder why they're not already pending escrow. Yet at the same time could also cut down an investor's workload.

Scott, good point on making sure that the bank wants to play -- definitely don't want to waste my time.

Has anyone had any success working a short sale that was found on the MLS? Has anyone had any problems once you put in an offer?

Thanks.
Moeskii

Edited: 06/26/2010 at 08:05AM

Aly L

Real Estate Investor · Middletown, New Jersey

636 posts
2707 Influence
6 Awards

Icon_minipost Apr 30 '09, 05:46 AM

I've got 3 offers pending on short sale properties that are on the MLS.

In one case, the listing remarks say the bank has approved the SS and will be offering a bonus to the buyer's agent. In the last 2 weeks though, my agent hasn't been able to get any response from the listing agent.

The second SS offer is a week old and the listing agent told mine that there is a BPO on the property but the bank will take it's time getting back to us. Nice.

The third one rejected my first offer 2 months ago, so I resubmitted it a week ago. No response yet.

Edited: 06/26/2010 at 08:06AM

Scott Hubbard

Rehabber · Tucson, Arizona

1025 posts
11652 Influence
11 Awards

Icon_minipost May 03 '09, 03:52 PM

Doing short sales in the MLS are problematic for investors for a three important reasons.

The first: It is very difficult to influence the BPO. The second: Most listing agents will not allow you to negotiate with the seller's lender. Third, paying comissions could turn a good deal bad.

If any of the above come into play, I will not make an offer.

If your doing an MLS short sale, it was probably already rejected from an investor. Most experienced investors are already working with mortgage brokers and RE Agents that have SS leads from their client base.

When I get a lead from an RE agent or MB, will do an FSBO sales contract w/ the seller, then list the property with the referring agent using an option contract. That way I can negotiate the short sale with the lender myself, and only pay commissions once.

Edited: 06/26/2010 at 08:07AM