Welcome to our Short Sale Group!

Hi Suzanne. I have pushed back hard on the notes if my client has a true hardship and it takes aggressive negotiating back on behalf of your client if a true hardship exists. So push back . It can work. Which bank is this? If there was mortgage insurance involved, that is tricky, that is the only one so far whereas our client is agreeing to a note.

Seminars who tell you that they will not be taxed without knowing their situation or what kind of loan or anything is misleading you. We can not negotiate with a bank not to file a 1099 - period. Your clients - if exempt from tax can work with their client to not pay it however if they fall within the guidelines and they are exempt. But always tell them to see a CPA even if they seem to be a pat answer as far as falling under the Bush mortgage debt cancellation act of 07 or insolvency. - We are not CPA's :)

You do need to be sure that the letter you receive from the lender as an approval does release the seller and doesn't have some fine print that they will go after them later...

Thank you for starting this group. I had a short sale listing a few months ago and it went rather painlessly. When I took the listing, I contacted the owner's lender (after being given signed permission from the owner to discuss the deal with the lender) and asked for their short sale package. I then sent the lender a copy of the listing, priced at 10% below market, comps for the area, a discussion of the area activity because the lender was out of state and does not understand our market, the short sale package executed by the owner (which includes a hardship letter). After receiving an offer, I sent that to the lender for approval after the seller signed the offer. It took about 30 days longer than anticipated to close. I had to call & email the lender daily for an update because of their internal approval process. The buyer's agent, title company and I spoke almost daily to keep the lines of communication open. The buyer was patient because her agent kept her informed. We settled 30 days later than anticipated, but it worked. I know all short sales don't work without a lot of pain and I am glad that we have a forum to discuss strategies.

Thanks,
Juanita Perry, e-Pro, GRI, MBA
Long & Foster Real Estate, Inc.
Burtonsville, Md 20866
O: 301-384-8700 C: 240-426-4812
www.yourhomeconsultants.com
juanita.perry@lnf.com

Hello, I partner with Catherine on the short sales here in the Bay Area.

I am grateful to have a professional to work with who is knowledgeable, compassionate, works with integrity and comes out like a pitbull when she senses our clients are getting shafted.

It certainly has been a learning experience. Obviously the banks do not think at all in terms of how the average person or Realtor sees things.

Especially when they allow a short sale to go to foreclosure and had they accepted the short sale would have netted easily $100000 or more than what they received thru the foreclosure process.

Rules are constantly changing. Some lenders cooperate more than others.

The theme and backbone is to have systems in place, consistency and don't take no for an answer. One of the things that has been realized is due to the inexperience of many of the gatekeepers and the fact you usually will not get the same individual twice is to call back to get access to another level. Does not always work but Catherine has had great success with it.

Hi Catherine,

Thanks so much for all the great information. The bank we were working with in my case was Countrywide. I have found this to be such a learn as you go process. It is refreshing to have an outlet such as this to speed the learning!

Hi Catherine,

This is such a great idea. I had a listing taken at 5%. A couple of months later the seller called me to say it was going to be a short sale and the bank would only pay 4%. We agreed to that. The day before the closing I received a call from the seller's attorney saying they were $15,000 short and we would only be receiving $20,000 instead of $35,000. My company is now in the process of going after the seller. Should they be going after the bank?

Felice Wyloge

Weichert, Realtors

Hi Felice, wow, its amazing it would close being short like that , we check and re-check our estimated settlement statements and are really careful with prorations, etc. etc. I think they have to go after Seller if that's what they want to do as the listing agreement is between the brokerage and seller, not the bank. But isn't it a little like squeezing blood out of a turnip?

Hello:

I am thrilled to also have found this group. I am representing a buyer on a short sale involving Countrywide. After 2.5 months we found out the offer was declined. My clients are very upset that there was no counter offer from the lender. I explained this was not uncommon and that we are dealing with bankers and their bottom line and not realtors used to negotiating sales. I am encouraging them to up their price and go back in since their are no other offers, and especially since I felt their offer was about $20,000 too low based on the recent comps.

Is anyone else also experiencing the fact that lenders do not give counter offers?

Nancy Makowsky, Broker Associate Coldwell Banker - Laguna Beach, CA

Call countrywide back. As them to do triage with the new offer.

Hello Catherine et al,

First of all let me thank you for creating this forum, what an amazing idea! I am brand new to the process of short sales and have a lot of questions.

How do I know how much my initial offer to the bank should be (in my intial documents to the bank, before a BPO has been ordered)?

I read about these deals where people take a 230K loan and negotiate it down to 155K and then sell the home for 200K, making a 30 profit. How does this work? From my understanding the bank will make their determination of an acceptable price based on the BPO, will the BPO not come in around the fair market value for the property based on comps etc? If the owner owes 230K and the home is valued at 220K by the BPO, why will the bank take any lower? And if they don't, how can you make money from the whole deal?

What is an option contract and how does it work?

Thanks again for this forum and thanks to anyone who might be able to shed some light onto my questions!

Michael

Hi Michael,
I too am new to the Short Sale forum and I am very happy to have access to this wonderful information submitted by so many experts in the field!
I am about to lose my first short sale to the Sheriff auction, mostly because of the "uneducated" realtor who completed the property BPO. She advised that she got the BPO up as "high" as she could to help me out. I nearly fainted. In the future, I will meet the agent at the property with my comps in hand so we can work together. I select comps from 1 year ago, 6 months ago, and the last 30 days to show the market decline. The bank incurs $20,000 - $30,000 in attorney costs and fees and will usually accept an offer less that amount. I will be happy to hear other thoughts on my theory. Any and all suggestions and ideas will be gratefully appreciated.
Sincerely,
Maryann Maki, ABR, e-PRO, MSP
Boulder Bay Realty Group
Valparaiso, Indiana
219 241-8220-CELL