Short Sale.. MUST READ

[z9402305245]

Anyone doing short sale or interested doing short sale.

It is best to do a short sale when the property is in the pre-foreclosure state. Yes, you can perform a short sale when the bank owns the property, however your profits will more than likely be smaller. There are two stages within pre-foreclosure. The first stage being those individuals who are behind on payments and the second stage are those who are behind on payments with a notice of default. In order for this to work properly and for you to successfully get a short sale, you must find the homeowners who are in the second stage of pre-foreclosure or more than 3 payments behind on their mortgage. Once the notice of default has been recorded, banks become motivated as well, so you are more likely to get a discount. Until that time, very rarely will a bank ever discount a mortgage that soon. Why would they? The homeowners still have time to cure the loan and make up the back payments.

[Sparks]

Good info.

Thanks

[BRITT REED]

thanks for that info

[jayess321]

Interesting. But, when you get to that stage is there enough money left to pay the commission? Is that re-negotiated to help make up for the bank's shortcoming?

[Orlando MLS]

That's a good point. However it is not a short sale once the bank owns the property (it's an REO), prior to REO it goes through a foreclosure auction.

What the agent must do first is try and market that property at full price first - to show the bank they have been doing all they can to have the home sold at full price. After doing this for a while they can start discounting. So you are correct when you say there is more chance of approval towards the end of the sale.

A second mortgage from another lender can often force the home into foreclosure without any chance of acceptance on a short sale from the banks.

[misch.chief]

ok, that is fair enough, thanks

[Portland Real Estate Guy]

The lender will usually cut the commission in a short sale. Its a good idea to have a little disclosure in the MLS. Its a good idea to mention the agent commissions will be split from the total commission the bank will pay.

[SLICKRICK1170]

i lease a home under foreclosure and i believe he is behind several payments the house needs some work and changes estimating around 70k some are personal change the rest things not done under code the owner owes right around 190k i was told to offer the bank 70% of the face value of mortgage and ask for a quick sale is this feasable? if a home inspection were to be done there would be alot changes needed to be done! but im aware if i purchase it would be as is! my comfort zone is around 200k the method to my madnress would to purchase home around 120k and put in 70-80k in repairs and remodeling am i dreaming here?