What's the next step in short sale?

Question

Hi everyone,

I'm super new to short sales and I'm just learning as I go. I'm not sure what to do next and would like some feedback.

I have a property picked out. The owner of the property is willing to go through the short sale. I've been able to negotiate on the 2nd mortgage and they are willing to take a reduced amount. The owner is going to submit a letter of authorization to Wells Fargo which is 1st position soon.

After that is where I'm not clear on what to do? Do I write up an offer and send it to the owner? Or Do I talk to Wells Fargo first and see if they will accept a lower amount?

Looking forward to reading your feedback.

Thanks

Account Closed · Answer

I think it was a waste of time to start with negotiating with the 2nd.  The senior lien holder essentially sets the terms of the deal. They decide what they are willing to let the 2nd have, how much they are willing to pay the agent and what other debts, if any, they will allow to be paid.  Wells is on top of their game and will expect the property to be listed for a price that reflects the property's true current market value.  Do you still want this property if you have to pay FMV or better?  Is there some condition or issue that will deter other buyers?

Kathy Judd · Answer

FMV is around 140k. Idaho has no post-sale statutory right of redemption for foreclosures.

Account Closed · Answer

@Kathy Judd  Is it the property in S.?  On L. for $100K?  If so, that property is an REO owned by Wells and is listed with an agent.  You would call them to make an offer.  Not a short sale situation.  Both the borrower and the 2nd lien holder are out of the picture.

Account Closed · Answer

Wells can't list or sell the property if they don't own it.  Only the seller can sell it. Is the $100K the minimum bid for the pending trustee's sale?

Wayne Brooks · Answer

@Kathy Judd You must be missing something.  If Wells is "listing it on some web site" then either they already own it, or that's an advertisement for their foreclosure auction, ie. the way auction.com advertises the foreclosure auction when they are the foreclosure trustee.  You need to know which it is.

Kathy Judd · Answer

@Lisa Troxel Thanks that's a good point. I'll contact my title company.

Kathy Judd · Answer

The payoff is 130k. So if Wells Fargo is listing the property on website for let's say 100k, does that mean Wells Fargo has already willing to take 100k for it? Or are they just using this trick to get more people to bid it up?

Lisa Troxel · Answer

Hi Kathy,

Up here in Coeur d'Alene, the title people are the experts on short sales. I think the laws in Idaho are a bit different or maybe it just that Idaho is still 10 years behind (jk). Call up your favorite title company, see if they have a short sale person and then pick their brains. (Ew-zombie scenes just flashed before my eyes)

Account Closed · Answer

And what is the payoff amount, approx?  You're sure it was a nonjudicial foreclosure (trustee's sale, no court case)?  Idaho does have redemption rights for judicial foreclosure.

What's the next step in short sale?

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