First Time Short Sale - What do I need to know?

Question

Hey everyone - really need some help and fast!

I've been working on a lead for some time now, they owe a considerable amount of money. For some reason I never considered pursuing a short sale until the seller reached out to me saying that another investor wants to buy her TWO homes with a short sale (on one home they are behind on their mortgages, taxes,  and a few other small liens; on the other home it's just the mortgage and a small amount of taxes).

I have a very good relationship with the seller so that gives me the upper hand so long as I can make moves quickly. Time is of the essence. That's the problem though - I do not have a lot of time to act and I need to prove myself to the seller by making tangible progress (an offer, etc.) but have not performed a short sale transaction before.

From my understanding, I will need to reach out to their lender and see if that's a possibility. Is that my first step? What else can I do to get this moving and lock her in to dealing with me?

I get WHAT the process is, but am trying to understand the HOW behind making it happen. Looking for any advice.

For a little more background... the one house is problem house, it is a full gut and practically worthless (they owe 25k, ARV around 100-110k) and the other home is in fantastic condition, ready to be rented (they owe 20k on I believe at 228k mortgage, home can be resold for 260k give or take, or rented as it is in a highly desired neighbourhood).... Multiple people have started reaching out to her so I feel like there is opportunity at the right price

Brett Goldsmith · Answer

Account Closed  I'll send you a  PM and happy to point you in the right direction.

Lydia R. · Answer

@Wayne Brooks Ah ok! I knew I had to be missing something! Thanks Wayne!

Wayne Brooks · Answer

@Lydia T. When he said they “owe $20k on a $228k mtg”, I assume 20k is the arrears, balance is $228k.

Lydia R. · Answer

@Tyler Psenicska From what youve said I dont understand why a short sale is necessary. You said they owe 25k on the house that needs to be gutter and 26k on the house that is nearly rental ready. Why are they not just selling for cash? They have a ton of equity in both. I dont see the need for the short sale here unless there is something Im missing.

Wayne Brooks · Answer

First step....find a local Wxperienced short sale agent.....the bank will require it to be listed for a short time and more importantly someone who Knows what they’re doing needs to put it together, including determining what add’l money a buyer may need to kick in to junior debts Before making an offer.

This is Not a “figure it out as you go” project......many times the short sale is doomed when the purchase contract is signed, not considering all the proper factors that a first timer would never have heard of.

Phil Z. · Answer

If you insist in doing the short sale, all you need to get started is a signed authorization form to talk to the lender. Google their website and find their SS dept phone number. Then get the fax number to send the authorization. Once authorized they will tell you exactly what they need. Theres a bunch of little tips and tricks to keep things going smoothly or you can find it fustrating.  A short sale is supposed to be easy enough a home owner can do it ..

Also its unlikely. but possible, if its not listed on the mls and/or your also the buyer.

Minna Reid · Answer

There is a whole lot that needs to happen in a short sale and seeing as you don’t have a lot of time I would highly recommend you seek an agent or attorney well-versed in short sales to get this deal together for you.