Doing first short sale. Need major help

[Stephen N.]

I'm trying to do my first short sale and I really need help.

Here are the details:

FMV of house based on comps: $155K
Repairs needed to property: no more that $20K
Total owed on 1st to Wells Fargo: ~$163K
No second mortgage
Owner is 4 months behind

Man lost his job a few months ago and hasn't been able to find work here. He is actually leaving town today to move to Oklahoma where his wife's family lives. He will be making roughly half of what he was making here (Louisiana).

I had the owners sign an option agreement for me to purchase the house for $91,250, but in the contract it states that whatever price I negotiate with the bank is the final price.

Here are my questions:

#1) is the $91,250 too low? Should I bump it up? and what's the best way to do that since the option has already been signed?

#2) Wells Fargo told me they require a copy of the 'listing agreement' and the MLS description.. the house is not on the market right now. Do I have to list it in order to do a short sale? I'm the one that wants to buy it.

#3) They are asking for a 'decline of value letter'. Do you think if I show them recent comps that will suffice?

#4) They asked for a 'financial worksheet'. Any suggestions on format for that??

Thank you in advance for your help. i really appreciate it.

[Justin S.]

Stephen-

You are not the bank, you are an investor. If you are worried about what the bank thinks, then you are not in the right mindset. You always, always, always want the bank to counter your first offer.

1. Banks typically counter most offers. If they reject an offer, which is rare, just submit a higher offer.

2. A foreclosure is very expensive for a bank. They are motivated to sell before foreclosure than having to pay legal fees, agent fees, cleanup fees, etc. Plus, the bank cannot loan money against a bad loan. They want to clear the loan so they can loan on other properties.

3. You said the property needs repair, the bank does not know the extent of the repairs. So they have no idea if your offer is lowball or not.