A "sample" Short Sale Presentation
I have received many requests and have been on several phone calls with investors of various types requesting for me to display how we approach each short sale presentation. I first will make a huge disclaimer: This is how my company approaches each short sale. There are many, many, and many more different ways to approach each deal. Feel free to use this approach.
When we receive a call into the office from one of our potential deals, we first ask this question. Is this property listed with a realtor? Our reason for asking, is simple, in our business plan we have decided to not pursue properties that are listed with realtors. If the property is listed, we simple let them know that we do not pursue properties that are listed. If the property is not listed, well here we go.
Our next step is to define who we are. We state, “We are a local investment company that specializes in purchasing properties that are in the foreclosure process.” We also ask is they are interested in SELLING their property. If they are interested in selling their property, we set up an appointment to look at the property.
At the set appointment, we look over the property and talk to the property owner. We at this point discuss how we purchase properties. We state that in today’s market, most properties that we are running into, the owner owes more than the property is worth. Add this to the fact that they are behind on their mortgage payments. This leads us into the conversation about “short sales.”
We explain that a short sale is pretty simple. This is when a lender or lenders agree to accept less money than what is owed for a certain mortgage. Upon the agreement, the sale of the property will take place. We further explain that this process can take from 6 weeks to several months. The faster and more compliant we are, the quicker the process. Also explained is the fact that they, the owner, will not profit any funds in this transaction! We also state, that we will not in any way pay any funds, to the property owner, outside of this transaction.
Next, we explain that we will not attempt anything, until we have received the complete short sale package and also a signed purchase agreement. We at this time, leave a check list with the property owner. As soon as the owner has the complete list, we will set another appointment to meet, collect the paperwork, sign the purchase contract, and any addenda that are required.Collect paperwork, Sign contract, Sign addenda, and move forward with short sale.
Comments (13)
Thanks for responding James, I am extremely grateful that you are willing to share your experience with us,thanks again.
Nate Smith, over 14 years ago
Nate, I am going to make a blog post to answer your questions. Chino, IT can take a very long time for a short sale to get approved. Especially when a realtor is envolved! Simple answer is to more funds. Nick, That was my first answer! I think I need to write a blog on the value of controling your own deals.
James Ward, over 14 years ago
fire your agent and gain control of your own deals.
Nick J., over 14 years ago
Is it legal for the listing agent to start escrow without the approval letter? My agent told me everything was done and I'm 2 months into it and my funding expired. What do I do now?
Chino Baby, over 14 years ago
James,thank you so much for responding so quickly! What I have done recently was to knock on doors to clients that are in default. My plans are to do the shortsale paperwork once I have a willing client.My wishes are to flip the property to an end buyer and make profit from the spread.Would you please tell me what I need to do to make this happen.As far as the proof of funds letter you spoke about,will this serve the purpose of my closing this deal and sell to an end buyer? Please elaborate,I would most appreciate it,thanks again....
Nate Smith, over 14 years ago
Nate, Thanks for the complement! A first piece of advice- before you go and spend any money on courses, simple read and ask questions. By joining in on the forums here on Bigger Pockets, you will find answers to all of your questions and more. To answer your questions. 1) We use the FAR/BAR (Florida Purchase Contract). But for California I reccommend to use the California contract. I know it has all kinds of addenda, but it will also cover you pretty well. If you need a copy I can eMail a copy, Google it and you will find a copy, ask a title company, or get one from a Realtor. 2) You will never be able to assign a contract that a short sale has been accepted. (Those days are long gone!) You will need to close the property and then resell it. 3) You can acquire a Proof of Funds letter from a number of sources: Transactional Lenders are the quickest. Any more questions, simply ask!
James Ward, over 14 years ago
Hello James,I personally think that you are a Godsend! I have been recently searching the web seeking info on how to do shortsales,although I have received some good stuff, the article always leads to an enormous fee that I cant afford due to my being recently unemployed.I sincerely appreciate your experience and help. My first question to you is #1.What is the name of the purchase contract and contract for sale do i use here in California? #2. My intial intentions are to assign the contracts to make money and proceed in the process of doing what you do.How to I proceed in this process of submitting shortsale packages to lenders with no proof of funds? Please help,this has been a major headache for me,thanks.
Nate Smith, over 14 years ago
Justin, Thanks for reading and commenting. I love when people post and let me and other readers know how they perform their deals. There are many ways to accomplish the same final end. Your way sounds great. I like the way you take pics and put the lock box all in one stop. GREAT PLAN! Thanks,
James Ward, over 14 years ago
James- Good post. With a full time job, I find that I do not even view the properties until I get the paperwork signed and the hardship package completed. After I meet them at the bank to the get the docs signed, then I will setup a time to view the property, take pictures, and put out a lock box. Thats just me though.
Justin S., over 14 years ago
Connie, Thanks for reading. Also, I have learned many things by way of doing it the hard way first. I just hope that my blog posts will assist in some way.
James Ward, over 14 years ago
dear james, you are correct with that you need to work with the owner and bank directly as i found out the hard way lol wish i had read your post earlier lol ttyl connie
Connie Wahl, over 14 years ago
Thanks for the comment Nick. I have taught many people how to perform short sales. All of them "tried" the listed route. All of them now go direct the property owner.
James Ward, over 14 years ago
I agree with ya on the 'listed with an agent' part of it. it can be done, but as you know it's a HUGE PITA, I've got a over anxious student right now that is having a hard time understanding that you want to be direct with the seller, he'll learn soon enough. Good post! Laterz
Nick J., over 14 years ago