Homeowner Short Sale?

Question

I know that a homeowner can negotiate their own loan mod, but can they negotiate their own short sale? Obviously the lenders will want to see an offer on the table, so if the owner has an offer can they contact the bank themselves and start the short sale process?

Jonathan Rexford · Answer

In short. YES but why would they. The lender is going to ask for proof that it was for sale. If the seller can document that then ok.  The time frame? That is subjective. I have seen short sales hit the market and under contract that afternoon and approval letter done in 3 weeks and close in 30 days. But I am not sure why a seller would want to. Plus its going to be subjective to the lender. Most (some) want it to be listed on MLS.
The ones I do they want listing contract all modifications of listing contract along with MLS sheet.

Scott Hubbard · Answer

A seller representing themselves in a short sale is akin to a defendant representing themselves in a court of law.

Of course it is possible but there is no advantage in it.  Moreover, there is even a higher likelihood of getting resistance from the lender as they might be distracted with collection efforts.

Matt Castelo · Answer

Thanks Scott.  Yes, these leads that the Realtor are referring are not listed on the mls.  He will be listing these properties himself, but allowing me to make an offer before he puts them up.  Then he will be negotiating the file and try to get my offer approved by the bank or somewhere near that price.

Scott Hubbard · Answer

Generally, if your getting leads from a REALTOR, then they will want it listed in the MLS so they can get paid.

As far as putting in the listing status, it is subject to the rules of your local MLS association and is NOT up to that agent. I believe the status will change to active contingent if memory serves me.

Flopping short sale properties using  the MLS is very difficult.  You need to start with leads that are not already listed in the MLS or get the listing agent and seller to cancel the listing on the A to B, then pay the listing agent to relist and market the B to C.  Again, no small feat.

Nick L. · Answer

Scott - thanks for all of your great insight!

Matt Castelo · Answer

I have a few similar questions.  If I am working with a realtor who is referring me short sale leads to make offers on. Does the agent have to list the property on the mls before he presents my offer to the homeowner or can the homeowner accept my offer before agent lists property on the mls?

Also, what should the agent have the listing as when offer is accepted by homeowner?  Should he disclose it as sale pending, pending contingent on lenders approval, or can they leave it active to attract back up offers?  Of course I would like as many back up offers as possible to create my list of end buyers. 
Any insight is appreciated!!  Thanks guys!

Nick L. · Answer

Hi everyone - I was digging for this type of info on short sales, and wanted to see if the above answers still apply in today's environment.  I have a house under contract with the seller subject to her financing remaining in place and subject to negotiating a short sale with the lender.  We have the short sale package from the lender and are in process of completing it.  The package does not state that they need to see a listing agreement.  Is this something they are going to ask for?

The comps are about 60k, and she owes 70k.  She is 8 months behind on payments.  The seller had a hardship with death of husband and death of son within a 2 month timeframe.  The seller is in the process of evicting tenants due to 4 missed payments (should be completed in 7 days).  This was also a clause in our contract - tenants must be evicted.

The house was never listed but the seller called my bandit signs about 5 months ago, then I did some follow-up with her 2 months ago to get the house under contract.

After all that, my question: Does the seller need to have her house listed with an agent for me to be able to buy it as a short sale?  Thanks

Christopher W. · Answer

Thanks for the replies! That was the answer I pretty much expected.

Christopher W. · Answer

Really? Nobody knows the answer to this question? Come on, I know there are plenty of people experienced in short sales here. Has this not come up before?

EDIT: Huh. I just realized this is my 100th post. Yay me!

Homeowner Short Sale?

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