Investor · Menifee, CA · Member since 2015 · 25 posts · 15 votes
I'm looking for input on negotiating with a lender. I've found a major project that most investors have passed on because there's not enough equity for the owners to sell at that low of a price. Roof sagging, code issues, plumbing problems and cracked hvac, among other stuff. Has anyone had any success contacting the lender on the property about the scope of work and getting them to accept less than what is owed? I've never done this before but I've heard about it. I'm not sure what legalities come into play on this either. Any input is appreciated!
Has anyone had any success contacting the lender on the property about the scope of work and getting them to accept less than what is owed?
Hi Jenn,
That's called a 'short sale' and you as the person that wants to buy it aren't really in a position to negotiate it. Seller needs to hire a listing agent who will promise the lender that she will do her best to get top dollar for the place. You'd have to get that agent to break the law to push your offer over others that are higher and stronger.
Is the property an REO (bank owned) or is the owner still living in the property? If they're still living in it, then it sounds like it would be a short sale. If it's already an REO and the price tag is too high, it's a whole different challenge. Often, the banks come out with unreasonable list prices. Sometimes the property has to sit on the market for a while before they get real and adjust it downwards. I don't know for sure, but I have a sense that it helps to submit an offer where you think the offer needs to be, even if you know they're going to reject it because at least it represents real market feedback to the REO asset manager.
It's owner occupied and it's currently standard sale, not short sale and not in foreclosure. I've purchased short sale before but this property isn't in that position yet. I had heard of an investor who had contacted a bank and was able to get more favorable terms on a 2nd trust deed to get the deal to work. This was awhile ago though.