BiggerPockets

It is best to be in control of the deal and negotiations, so try to find realtors that will step aside and let you negotiate with the lender, in which case you are the initial buyer making an offer. If you do not know how to do a short sale, you can either learn, engage a negotiator, or be at the mercy of a realtor that may or may not know what he/she is doing. Double closings are typically done with transactional funding. Do a Forum search and you will find lots of info on the subject.

I've done all my Short sales negotiating directly with the bank. Once I tried a Realtor and she could not get the job done. Contact the loss mitigation officer for the property and find their requirements (each bank has its own required docs). If you are doing a pre foreclosure, more info from the seller is needed.

1. Is the realtor the one who negotiates the short sale? How is this done without a buyer?

You should negotiate you're own short sales. Have the buyer sign an authorization to release form and submit it with your hardship package. That way you can talk with the bank directly.

2. I have heard that once the short sale amount is approved you can have your realtor put the house right back on the market for quick sale......how can you do this without having to first close and transfere title? Is that the process?

You can market the property for sale once you obtain an equitable interest.

3. I hear about double closings, how does it work, if I have a buyer lined up?

Find a title company that is experienced in double closings. There are two sides of the transaction: A-B and the B-C.

A= Homeowner
B= You
C= End Buyer

The A-B is typically funded by a transactional lender (or if you have cash) you'll need to find one. A good title company already should have one lined up for you. The B-C transaction will take place within 24-48 hours of the A-B. The end buyer will need to have their financing lined up or be a cash buyer. They cannot be an FHA buyer. Communicate to the end buyer what is taking place so the lender doesn't balk on them. Good luck.

Thanks...this is helpful. Am I correct in saying that I would have equitable interest in the property once I have an approved short sale....and I assume the property under contract?

Depends on who you ask.

Some argue that a contract only gives you "marketable interest". Which gives you the right to market the contract you have on the property for sale, not the actual property.

You have "equitable" interest once you are on title.

Would I be able to list a property I have under contract on the MLS..before the title is transfered?

Jim - I know you want a straight answer but I can't give you one. I'm not a lawyer and I don't know the laws for your state. When I say "It depends on who you ask", I mean it. This site is split on whether a contract gives you equitable interest or not. There are several threads on it. There are numberous experienced investors that say "yes" and several that say "no". I asked a RE lawyer in my state the same question, and he said he'd need to research it. He didn't even know.

Things I do know are:

Being on title gives you an equitable interest. No one argues that.

Having an option contract with the homeowner gives you marketable interest. This allows you to market the contract with the house, not the house itself. It is a gray area though.

Does your current contract state you can market the property?

***I'm not a lawyer and this should not be taken as legal advice*** Just in case.

Originally posted by Jim Smith

Would I be able to list a property I have under contract on the MLS..before the title is transfered?

I'd agree with Justin, it depends who you ask. Personally, I wouldn't dig too deep into it because I don't want to let a property "sit" on the MLS. I would spend more time locating quality buyers. If your working with rehabbers they will either pay cash or use hard money which makes your job much easier.

Don't get me wrong, it would be great to sell the property at a higher profit margin to a retail buyer but there are a lot of hoops to jump through to get that done. Also, when listing a property on the MLS (especially these days) you'll encounter a lot of FHA buyers that you won't be able to sell to because of the 90 day seasoning rule.

IMO, the best thing you can do is find QUALITY BUYERS.

Jeff

in finding SHORT SALE properties, you need to negotiate with the loss mitigation dept. at the bank. BEFORE you find quality buyers, you need to know what the price will be.

I disagree with this statement. You should be marketing the property for sale as soon as you obtain an interest in the property. There may not be enough time to find a buyer if you wait till the end of negotiations. You should be able to come up with a buying price and selling price to create your spread.

Has anyone had any luck with having the agent negotioate? It just seems like a lot of work to maybe not even have a deal at the end. There are so many foreclosures out there, a lot easier work with.

It would be worth it if someone else did the neg. but I wouldn't want to spend all my time just to end up with nothing.

Hey Jim - good thoughts :)

Short sales are a lot of work - do not beleive anyone who says they are easy and quick Maybe one out of a hundred are but most are a lot of work.

Justin is right on make sure they have skin in the game but be sure to manage your own expectations - meaning you may not get the deal - there are easier ways to make money in this biz but short sales can be worthwhile although frustrating at times!

David-

Are you flipping the properties yourself or representing the buyer/seller?

If you are willing to share, what profit margin are you averaging per deal closed? I'd agree with you that there are more good deals than great deals. But there are A LOT of good deals.

Thanks,
Justin