Tips to get short sale offers accepted??

[mostproperties]

Anyone have tips on how to get your short sale offer accepted??

[Gold River]

Hi,

    If you have not done a short sale, the first obvious thing is creating a comprehensive "Hardship" package that is complete!

Then I send additional written support of the market conditions, required repairs and upgrades, I take photo's of the property and include them in the package as proof of less than prestine condition!

Include any contractor estimates and other supporting documents.

               GR

[mostproperties]

Thanks GR.. This property already has a SS package and short sale is approved by the lender.. I found it on the MLS.  I've got comps, should I also get a BPO prior to submitting my offer?  This is going to be a "buy and hold" for rental income.  The asking price will make this a cash cow but comps are coming in around $20K lower. Also, this property will only need about $5K worth of work.  The seller owes $160K, asking $129K.  Should I lean closer to the comps or asking price??

[Gold River]

Hi,

    I just had a bunch of "RED FLAGS" pop up in my mind in reguards to this property??????????

First as a real estate investor you do not want to buy for "RETAIL" as that is not prudent to investing in real estate! I know it's tempting to buy a property retail as you own it, the deals done and you can rent it and make the payments and some cash flow.

I would guess from reading your post that this property is listed by a real estate agent that was recruited by the current owners because there upside down and no longer able to make there payments, so this agent submitted a "Short Sale Package" to the lender and got it "Pre Approved" for Retail FMV (At least at the time of the original approval).

You see for lenders there a two mind-sets, one of a retail sale and one of excepting a discounted offer from an investor to move the property "Off The Books". You are in a situation where the lender has been put in a mind-set to go after a retail sale to an "End Buyer" (Owner Occupied).

Now for you as an investor you see the comp's as you indicated and believe the comp's to indicate value at $20k less than the $129k approved price, this indicates you believe that actual FMV today is $109k!!!!!

Now as a real estate investor you should be offering 25 to 30% below that FMV minus repair cost's, so you actually should be going in with a $76k to $82k offer minus repairs at $5k so your actual offer should be in the $71k to $77k range intending to make it a flip or a portfolio property.

Now on this property since there's an agent who has already established a retail mind-set in the lenders position they will never, ever move to a "Get it off the books position", so you are wasting your time on this property!

Now you need to find a property under the same scenerio that has a NOD (Notice of Default) filed but the current owners (In Default) have not retained an agent, which allows you to walk in prepare a package and submit to the lenders offering to do them a service and take the property from them to get it off there books!!!!!!

This property your refering to in your post is not for you and you would be paying way over what you should pay as an investor!

                           GR

[herbster]

I agree with GR, as I was reading your first post I was thinking the same answer GR gave you. Often a realtor will hold out for top dollar when it means absolutely nothing to the seller assuming the deficency judgement was waived. To the realtor it means a bigger commission. Find something not listed and hire your own realtor for a BPO and comps. Always start with a very low offer, you can always go up but not down.

[mostproperties]

Thanks guys!!  I've learned a lot being in these forums! Being new to this, it's awesome to have you guys out here to bounce ideas off of!!

[ShortSaleArtisan]

Anyone have tips on how to get your short sale offer accepted??

A couple:

1. Make sure your package is ironclad. Include any lender-specific documentation if necessary, number all your pages, and include the loan number on all your pages
2. Follow up repeatedly with the loss mit person assigned to your loan. This means over the phone. Especially if things slow down.
3. Make sure your hardship letter is well written and describes the situation clearly to the lender. Remember, you have to look at this from the lender's perspective: THE RESULT OF NOT ACCEPTING THE SHORT SALE OFFER NEEDS TO BE WORSE FOR THE BANK THAN ACCEPTING IT. That's the meat & potatos right there. You need to PROVE that.

[DJP]

Yes, Make sure the lender has every doc they need for the SS Package.
Try to find out the BPO value - from the BPO agent or the lender.  Just ask what range it is within or how far off is your offer of $XX,XXX.
Then do you research on what type of loan it is (ie: Conventional, FHA, VA,etc) and who the owner of the note is (a loan servicing company most often negotiating the short sale).
From there you'll have a general guideline of what the lender may accept as a percentage of their BPO value. 

[Erewa]

Please correct me if I am wrong, But I think most lenders are making it clear what %age they are willing to collect. About 88% of BPO. Is it possible to go below what they say that they are willing to accept?

Also, Can we, (as investors) process a short without a real estate agent?

Thank you

[andydallas]

I've seen the 88% figure used on this message board, but I don't think there is any way to make sense out of what they will accept.  I've seen short sales/REO's go way below what they were worth, and i've seen them listed for a price thats crazy high. 

I've seen an REO sell for $85 with a pool, then a month later the identical house across the street, same condition but without pool, was listed for $135k, and they wouldn't budge on price (for the first couple of months anyway)

I've offered 120% of list price and not gotten the deal, and I've offered 75% of list and gotten the deal,,,it just depends no how fast the bank wants to get rid of it

[lauraalamery]

Please correct me if I am wrong, But I think most lenders are making it clear what %age they are willing to collect. About 88% of BPO. Is it possible to go below what they say that they are willing to accept?

Also, Can we, (as investors) process a short without a real estate agent?

Thank you

Yes, definitely. Actually I have found that banks are more willing to negotiate a lower number with a private party/buyer than a real estate agent or professional short sale negotiator. The key is providing a full complete package, but also impress to the lender that you are doing this for yourself, not another buyer.
Regardless, crucial points are: full complete short sale package, a very good hardship letter, meeting with the BPO agent and explaining your reason for offering that price (repairs to be done, distressed comparables, etc.) and persistance with the lender.