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   January 15, 2009

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   sunshine_today said:
   

   Are you talking about a short sale? and are you the buyer? If you are the buyer, it has nothing to do with you. A short sale means the lender is selling the house for what is owed on the mortgage, not what the house might appraise for. Usually it’d be under market value.

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   January 19, 2009

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   oldfatcowboy said:
   

   First I do not know whether you are looking to sell or buy.

   I have assisted with many short sales. From the buyers perspective you must asses the value and make an offer to the lending institution prior to the process of foreclosure.

   You need to know that the home-owner is struggling before they go into foreclosure.

   You then negotiate the price with the lender and the seller. getting the lender to take less than the seller owes.

   Most generally this is only accomplished if the seller owes more than the property is worth.

   You will need cash or a verified line of credit as the lender will not likely loan on the same property again.

   I have linked to an article below that is pretty complete.

   Single family is harder as it is a smaller portion of the total assets of the lender. Large multi-family and commercial is easier because the lender is out so much money and they are restricted in how much they can loan based on the amount of bad loans they have. Federal law restricts lending institutions from lending more than a certain percentage of good assets.

   Often in larger acquisitions you can expect to purchase for as much as 20% less than owed.

   Occasionally more depending on the properties condition and other facts.

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   January 20, 2009

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   Janet said:
   

   Short sales are not negotiated, as far as price, although other fees are open. The bank doesn’t want to pass offers back and forth, and they really do not care how long they sit on a property.

   As far as the “normal offer”, again it is asking price, but that is either at mortgaged value (not retail value) or even below.

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   January 20, 2009

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   hunter2 said:
   

   The term “shorting or short sale” refers to the fact that the lender is in a position of having to take as a sales price LESS than the current loan amount.
   The current loan being what the Seller owes on their loan balance.
   The Seller is motivated to do this because it is either this or a foreclosure. They are out of options.
   The bank is motivated to do this because they have loaned more than the property is currently worth. A foreclosure is coming soon, unless an agreement can be reached with a new buyer.
   It is not really possible to give you a percent as each property is different.
   The listing broker is aware of what the current “bottom line” for the bank is. They are often authorized to tell the prospective Buyer what that figure is. This dollar amount is what the bank “says” they’ll take. They usually don’t take a lot less than what they are indicating. That figure may drop over some months so it is good to know how long this has been hanging in this limbo. Because during this time the bank is not receiving payments, usually. So they get pretty motivated over time.

   But here’s the catch with a short sale…sometimes the property is not only NOT worth what the current owner owes to the bank. It isn’t worth any where near that amount either. So just because it is touted as a short sale doesn’t automatically make it a good buy.
   As always, you need a good licensed agent to work on your behalf to help you determine what that property is really worth to YOU. And what it’s true fair market value is.
   Best of luck! Shop long and hard before you buy that is the surest way to get a good deal on any real estate.

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   January 23, 2009

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   Skip said:
   

   I think you are speaking of a short sale.

   If you plan to do the short sale yourself, I suggest that you purchase a book on short sales. It will give you some idea as to how a short sale is performed and under what conditions a lender will entertain a short sale.

   The lender does not permit too many mistakes either on the phone or in the completion of filling out the short sale package they will send you.

   Most lenders will want someone that knows what they are doing.

   You need to find out the name, address and telephone number of the lender. Once you have obtained that call them. Ask for the Loss Mitigations Department. You are doing this on behalf of the borrower so make sure you tell them this. Since you are doing this on behalf of the borrower you will need their authorization form.

   Once you have the Loss Mitigation Department ask them to send you a Short Sale Package. You will need to fax them the borrower’s authorization form to the lender in most cases.

   Once you have the loss mitigation package follow the instructions and complete everything required of the package.

   You will have to give the lender a price for the property that you think it will or should be sold for. You have back this up with photos and other documentation.

   How you determine the offer on this short sale will have to do with how much repairs need to be done, the cost of hiring someone to do these repairs and other factors. How much are other houses being sold for in the area. These things will determine the offer you make to the lender.

   The lender will have a realtor do something called an appriaiser, but it will be done by an a real estate agent the lender has signed up to do this type thing.

   Once you have completed the package send it back to the lender with all the pictures you have to support your price.

   I hope this has been of some use to you, good luck.

   “FIGHT ON”