Short Sale Help!

Also, the main reason for really liking this one is because its in a hot "zip code" great school district, futher up the street about one mile radius houses, although 10 yrs newer are at FMV 250K+ --I know that Joe Jurke did one of his first deals on an REO by dealing with the bank directly, so what are my options at this point since this mortgage is not in REO status and subject to the existing loan is not an option with the seller. She leased it out to tennant who was to do the work needed to it, he left in 6mons after only pulling out the carpet.

"All you need to do is ask. If you are convinced that you will get what you ask for at the very moment you ask, if you act as if it is already yours, you will get it"----Mark Fisher

minus repair cost=

minus your fee=

minus your buyers ROI= (most REI want 20-30%ROI)

How much does seller want to get out of deal?

where does this leave you?

IF it will sell fast or comp at $250k that changes everything!

Mike

Yes Mike here are the numbers:

Sold Comps from MLS= 155,559.00
cheaper grade carpet with quality pad 2126 sqft= 5,000.00 (guesstimate from Lowe's)
bath cabinet/vanities= 200.00 toilet ($100)=total 300.00X (2.5ba)
tile= 850.00 for 2.5ba
kitchen cabinets and floor of the same materials= 3,000.00
Paint interior 1500.00
Total repairs= 10,650.00 estimates
My assignment fee=5000,00

Sold Comps= 155,559.00
Total Repairs= 10,650.00
Assignment Fee= 5,000.00
Pay OFF= 128,000.00

Total Equity left= 11,909.00
The Sellers Just want their loan paid off!!

I could get better estimates realistically on costs of repair and photos to present to by REI as well. Does the fact that they filed bankruptcy affect any of this? They arent looking to profit, just someone to purchase at loan balance!

PUSH= Persever Until Something Happens
(I hate editing, so please excuse spelling, gamatical errors)

The House is a 4 bd 2.5 ba with 2126 sqft
Built 1978

Mortgage Payments 1350.00

I should also say that these sold comparables suplied to me by realtor from the mls.

There are 300+ houses that sold about 1 mile away as well which I did not use just so that I could focus on a better estimate with same age houses and approximately same square feet. The average sqft house that sold from the 7 comps I used averaged at 1857.57 sqft so sold comps were a bit conservative since this house has an additional 250+ sqft.

Hi Kathy,

I read in your original post that the current owners have filed bankruptcy. My understanding is that supersedes any other court actions. So any foreclosure, short sale, transfers of title etc has to be approved by the bankruptcy court first.

So not sure if short sale is an option. You may want to chat with an attorney if possible (a lot of times the initial consultation is free).

Hope that helps,

- Tom

thanks Tom,

So far, looks like, talking with the owner, he says that he has left it out of their bankruptcy, his words were: "The court/judge didn't want it" so it was not included.

Although, he said Bank O Am. will foreclose at the end of October. Hmmm, so
why is the owner okay with that? I realize that Bankruptcy has already affected his credit so he may not care about the foreclosure.

So from a desperate sellers view I suppose he isnt motivated to short sale it because by the end of the month the bank will just
foreclose on it so, if he cant sell for what is owed then he may as well just let the bank foreclose. My experience, so far, has been in dealing with sellers in this situation is that they are turning over the deed to bank willingly. The banks motivation to have a property that they have the deed to signed over by desperate homeowner is better than having another vacant house where the owners move out and do not sign over the deed. The bank spends time trying to find these owners and in the meantime the bank adds it to their inventory of unaccounted vacant homes.

So what is my desperate homeowners insentive to hand over the deed to bank and try to sell it for balance owed for? I clearly see the banks motivation but not sure on the sellers. FYI-- In such cases I've come across the desperate homeowner had already moved and bought another house!

MY incentive would be to have the Loan Mortgage Info. so when the bank forecloses I will hav the info the bank requires to talk about the mortgage in which to short sale....I really want to hav e the process down right!!
I think I can get this deal, all I have to do it try,but need an angle!

Thanks for the Help One and All!

PUSH=Persever UNTIL Something HaPPENS

Hi Kathy,

I've bought a short sale before and the only issue I see here is that you're talking about buying through a short sale, but also assigning. The bank approving the short sale isn't going to allow it to be assigned, especially if someone is collecting an assignment fee. The assignment fee of $5,000 would be an additional loss the bank would incur. In other words, it would force the bank to take a greater than necessary loss.

My experience is that I personally had to be the buyer. I was preapproved, had to send in all my documents including proof of funds to close (my bank statement only), and even then it still took them 3-4 months to approve it. I also had to sign docs stating I could not sell back to the original owner, and could not resell for greater than 20% profit within 90 days.

So just wanted to share my experience. Good luck!

Tom

Yes thanks for reminding me about the short sale process where the bank the mortgage is with will not accept an assignment of contract where the amount agreed upon would have to be a full purchase at closing with financing. However, it could be done this way as a Double Closing, where I use my proof of funds letter close then simultanious close that same day with my end Cash Buyer! Plus can make more than a 5k assignment fee!
Now only problem is how do I communicate with the bank about this mortgage without the Release of Mortgage Info letter where the distressed seller fills out his loan number etc in order for me to communicate with the bank? He needs an insentive, perhaps?
Seriously, the bank doesnt want this one NEEDS at least 15k in Repair! CARPET< PAINT< BATH_KITCHEN CABINETS< They will be happy to have an offer when the balance sits and brews on their P&L's. Foreclosue will cost them money as well by the end of this month add that to the balance, UNLESS, the seller is signing back the deed in leiu of Foreclosure to bank!!

I fell a little bit like Sherlock Homes on a quest! I am but it's the only way I will learn!!

“Strength is the capacity to break a Hershey bar into four pieces with your bare hands - and then eat just one of the pieces.”
― Judith Viorst