Help with short sale?

7 Replies

My client mother passed away she’s looking to sell her home. Her mother took out a loan for 110k ARV138k

My first question is how do I negotiate and write up a agreement with the bank to lower price of what is owe on the property on the mortgage then release the loan afterwords?

Second question what do I need to sell it to do in this process?

The bank doesn't own the home so your purchase agreement will be with the ower of the home, subject to short sale approval. There is quite a process involved in the short sale approval, and 99% of the time the lender will want to see that the property was listed so I would recommend finding a realtor or lawyer that specializes in short sales to help you with this.

@Tone Mayfield , this does not necessarily sound like a short sale situation.

The seller (in this case the estate) does not get ANY money from a short sale. The lender is taking a loss and will not permit the seller to benefit when they are taking a loss. So, a short sale would be a lot of time and effort for the estate with not much benefit.

Since the owner is the estate, they aren't worried about any affect on their credit. I would contact the lender and ask if they would consider a "deed in lieu of foreclosure" otherwise known as a "friendly foreclosure". The estate would just deed the property over to the lender and be done with it. It would be simpler and less time consuming.

If you are an agent, you are not prepared to manage this for your client based on what you wrote. You should refer it to an experienced short sale agent, if in fact it is a short sale. A short sale will have to be approved by the VA.

@Tone Mayfield the lender is not an owner and will not secure a realtor. If you wish to buy this property you or the owner need to go find a realtor to get this thing moving along. 

Not sure what the other responses are about. Nowhere was VA mentioned. And a deed in lieu does nothing to help the OP purchase the property- which sounds like the OPs goal.

 Based on the numbers given it’s sounding like a short sale...unless the work is incredibly minor. 

Originally posted by @Minna Reid:

@Tone Mayfield the lender is not an owner and will not secure a realtor. If you wish to buy this property you or the owner need to go find a realtor to get this thing moving along. 

Not sure what the other responses are about. Nowhere was VA mentioned. And a deed in lieu does nothing to help the OP purchase the property- which sounds like the OPs goal.

 Based on the numbers given it’s sounding like a short sale...unless the work is incredibly minor. 



Reading from my phone "ARV" mistaken as VA...

Was the home in a trust or is your client or someone else on title? If not probate is likely needed. What is the home worth as-is? Too many unknowns to properly guide you but sounds like you may need to get someone more experienced in these matters involved.