Short sale deal?

Question

Going to look at a house tomorrow. FSBO. Asking price 69k, mortgage 61k. Owner of the house died and left it to the estate. 3 siblings. They all live out of state. Sounded like they would just like the place sold. When I talked with the brother he mentioned something about a short sale their attorney mentioned to them????

1) Why would thier attorney mention it? Maybe I misunderstood?

2) Would the banks consider a short sale under these circumstances? Not sure if he is/was behind in payments.

3) Can the family present some type of hardship letter to the bank?

I think I need more info from him?  I figure since I'm going to see it, I might as well try to get an idea before hand.

Thanks,

Norm

Jeff Warner · Answer

I know what you mean, things always get in the way and take up time. You could have the number forward to your cell phone and answer calls in between building the deck. Just make sure you always have a pen and paper or notepad and you'll be fine. I always do business on the road and just pull over when the phone rings from a number I don't know.

Stay on top of the deal, your getting close. You've got some sharp short sale investors helping out too so it's just a matter of time. I myself am just learning short sales too so I'll be watching the thread and learning as you go. Good luck.

Jeff

Norm Chrostowski · Answer

Thanks, me too.

I agree about the motivated thing. For me, it just been other obligations I've had to take care of, so lately I haven't spent as much time as I would like. (which burns my A$$). I want it done yesterday, know what I mean?

I did however get a separate phone line in for calls from my ads and mailers, and ordered my bandits signs, so they're on the way. Baptism party today, and I got stuck building a deck for my brother inlaw, starting Monday! Again SH@#!. Just have to do some work at nite, after the "hard" labor.

Norm Chrostowski · Answer

I will definitely stay on top of it. Should be a nice deal if it all works out. We'll see, and I'll keep ya posted.

Jeff Warner · Answer

Norm,

This sounds like a good deal. I think this is an excellent example for people who feel like giving up to stay motivated and continue to actively look for deals.  Good luck, I hope all goes well.

Jeff

Norm Chrostowski · Answer

It does thanks.

I contacted Citimortgage Loss Mitigation Dept. and they said they needed the Authorization to Release lending Info. document. She even gave me the correct wording, word for word to put in there. I have to draw it up myself? I thought it was a standard form they could fax to me? Guess not?

I also have to find out if the brother is actually the executor of the estate. I'll call him tomorrow, and call the attorney handling this. I know his attorney through a friend. Yes, they did mention something about showing a death cert. too. There was no will, that's why it went to the estate.

My offer will more than likely be in the 25k range, depending what I find as far as other liens. Brother said last mortgage payment was April. So it's been almost 5 months, I'm hoping to create a sense of urgency.

So for now:

1. Get authorization form signed and sent back, along with Death cert.
2. Talked with Attorney and get his take.
3. We just can do title searches here in NYS. So I'll call tax assessors office, garbage tax office, and water bill office to check on the what might be in arrears.

Question:

Since I can't do a title search, how do I know or how can I check if there another lien such as a second on the place?

Thanks for the replies, and Nick J. for forgetting about me (joke..haha...lol)

Humbly,

Norm

Justin S. · Answer

Norm-

I just sent in a package yesterday to Citi Mortgage, they gave me the wording as well.  This is the only bank I've come across that does that.  If you didn't get the fax number for the authorization send it to: 866-675-5772.  Telephone is 800-422-1498.

They already called the homeowner about it today, so they are fast.  Hopefully it goes smoothly for you

You can check county records for a lien on the property.  I would imagine everything is online now.

Nick J. · Answer

you should be able to have an attorney or title company do a title search. I know NY is a little odd in their ways but I don't see why you can't get a title search done.

Norm Chrostowski · Answer

I'll Check with my Attorney on the title search...thanks

The number they gave me is: 866-272-4749. I hope it goes smooth also. They have to realize they have a loser on thier hands ( as far as property smart A$$es, not me. I read all your minds..lol). The owner is deceased, and the family IS letting it go to foreclosure. So pretty soon the "ball will be in their court". Good luck to you too Justin, and thanks Nick.

Norm

Nick J. · Answer

Norm, this is a great short sale candidate, except for the probate part of it. The attorney is probably the probate attorney and thats why he was mentioning the short sale b/c it's his job to liquidate the estate.

You'll need to contact the lender and get ahold of their short sale dept (or whatever they call it) and straight up tell them that the borrower is deceased and  then ask them what they need. I've done a few deals like this where the lender required a death certificate and the will showing the representative. Then they updated their system with the info. I then had the representative sign the LOA and all the contracts/forms and I was able to proceed with the short sale. The hardship was obvious.

As far as what you offer, We go in at 50% minus repairs. The last thing you want is for the bank to accept your first offer b/c then you'll know you offered to much.

I hope this helps

Paul C. · Answer

I wouldn't look at ARV in factoring the offer. My 2 cents is that its pretty safe to offer 50% less than the current value of the home + repairs needed (if 50% less is not greater than 75k for homes under 300k). So for example, comps show the house valued at 60k, but it NEEDS (not nice to have) 10k worth of work, so then the value should really be 50k, so from there 25k is what I would offer. Worse case scenario, lender says no or wants to get a higher price, then you go from there.