I contacted a homeowner who recently had his house listed on the MLS as a short sale, then removed the listing after a couple days. I know that he's upside down by quite a bit in addition to being past due on his HOA dues to the tune of $2,500 and he also has a personal loan out on the property in the amount of $8,000. Of course he's willing to sell me the property but what should my next step be? I told him to contact his realtor (since it's a short sale) and to tell the realtor to call me so that we can talk. Other than negotiating with his realtor, is there anything else I can do? Can I call his realtor directly or call his bank directly and tell the short sale department that I'm interested since it was recently listed as a short sale?
One other bit of information: the listing was supposedly removed because the bank did not want to forgive the personal loan of $8K.
Any advice is greatly appreciated!
Thats fine, let the bank not forgive the 8k. Thats not a huge amount. You have the upper hand here I believe because you can discuss with the seller how you can purchase the home. You can purchase the home at a lower than retail cost, but offer to pay up the back payments. Emphasize how this will help him avoid a bad hit on his credit score. The last thing he wants to do it let this become a foreclosure. He's at the point right now where you can still help the seller out.
Thanks so much for the advice @Steven J. . You said that I can discuss with the seller how I can purchase the home and my questions is (I'm sorry for the dumb question), but how do I do this if the homeowner is under water? Isn't it true that the house has to be listed on the MLS as a short sale for me to make an offer? Thanks for the clarification!
We had a seller who was a potential short sale at one point. we were hoping he would sign a document allowing us to act on his behalf to negotiate with the bank. There is probably a document in the fileplace on BP. Unfortunately, he didn't get around to it for whatever reason. Rather than the seller/Realtor negotiation with the bank you can do it and work out a potentially better deal with the bank. At this point, your best course of action may be to bring payments current making that part of the negotian of the sale of the home.
Thanks @Steven J.
Couple of issues. When you say "personal loan out on the property", is it a mortgage? If not, it has nothing to do with the property. If so, it has to be dealt with/negotiated out just like the 1st and the HOA. The problem mayo b he holder of the $8k loan is Not willing to forgive the debt for whatever discount is being offered. So, the owner must decide if he wants to remain liable for the balance. I suspect he doesn't , which is where the problem occurs. There's nothing you can do if the owner doesn't cooperate. Don't know why you'd want to catch up the loan and take over sub2, and be upside down. The agent will be able to give you a clearer picture of what's really going on. If you're going to do a short, you'll need the agent anyway.
Has the primary lender given him a number? You have to reach an agreement with him first. Getting him to agree is only the first step. Does his real estate agent have short-sale experience? I would for now assume that both the HOA fees and personal loan will be for the full amount. Basically get a sale price that works for you and submit it to the bank. Do you have a real estate agent on your side?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing