Documents for Texas Short Sales ?

Question

Anyone familiar with TX documents for short sales? Do I just use an Options contract or a sales contract ? I am in Colorado and just want to make sure I got everything right. Any suggestions for TX would be appreciated! The property is in Galveston on a canal and also concerned for any specific info on this location due to the hurricane risk to get the best deal. Thanks !!!
 :D [b]

April G · Answer

Thanks! Appraiser is coming today. Thanks for the calculation, it helps a lot!

Ayo F. · Answer

Keep in mind that FHA will only accept 82% of ARV if it is NOT less than 63% of the loan balance. so in this case, 82% of the appraised value cannot be less than 63% of $160,000 (loan balance)

April G · Answer

I will have a friend there with the appraiser to help to get it on the lower end. The trick will be trying to make some money on a flip with this thing if they wont go much lower than 82%. Thanks for your help!!

Ayo F. · Answer

the minimum FHA will take is actually 82% of appraised value

Ayo F. · Answer

Are they sending an appraiser or a BPO agent? If it is an appraiser, then it could be an FHA or a VA loan. If so, then FHA will take btw 88%-84% of what the appraised value is. U can negotiate below that so you should know where u will be before you even go through the trouble. The key is you being able to influence the appraiser and have him come in at the lower end of the scale. I'm not sure how you can do that if you are not present.

April G · Answer

HSBC is sending an appraiser. I am guesstimating that its worth about 145,000. He owes around 160,000. Its on a canal in Galveston and was affected by the hurricane. He did fix the damage but deck has shifted due to Ike, and needs a quote to fix it. Kitchen is new, mostly other fixes are cosmetic - carpet, paint, few holes.

Ayo F. · Answer

Do you know what the property is worth "AS IS" ?
Also do you know what it is worth fixed up?
How much work does it need?

My rule of thumb is to offer 40% of what is worth fixed up

Ayo F. · Answer

what is the "AS IS" value?
What is the fixed up value?
How much work does it need?
What is your exit strategy? Wholesale or rehab?

I generally start by offering 40% of fixed up value. They can only say NO and if they say yes, I still dont sweat...40% of ARV is good any day

April G · Answer

Thanks! Yes I found that site. On the contract it is asking for a selling price. Just confused, do I put a guesstimate for now? Does the bank (HSBC) look at that amount closely even though we havent discussed price with the bank yet?  I dont want to overprice myself.

Ayo F. · Answer

Hello April,

Here is a link to the TX contracts

http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp

You need the "One to Four Family Residential Contract (Resale)" and I also use the TX "short sale addendum"

Hope this helps