All Forum Posts by: Chris B.

No, I have a negotiator that was an asset manager for CW and Citi for 9+ years. She knows the banks inside and out and I have to say that if it weren't for her, we would not be able to close as many deals with as large of spreads or handle the volume. Her assistant is great as well.

I pay her $1,500 per lien and $1,000 if we need an extension (no matter how many liens.) I also will bonus her sometimes as well. I believe in taking care of those that take care of you.

Sometimes there is nothing you can do to get the bank to take a discount. We expect this to happen on a percentage of our deals. This is all about helping the homeowner avoid the foreclosure. My business is truly about helping people 1st and making money 2nd. As a result of my attitude towards it, My business is much stronger than if I were a shark in the water.

We make good profits on more deals than not so we can afford to treat our short sale investing this way.

Sometimes they do. We usually do an Exclusive non-MLS listing to evidence to the lender that there is an agent involved.

I have heard of other investors simply giving the bank a commission agreement. You have to remember that most of the time, the negotiators are more interested in having a full package with all the necessary documents.

Ae you flipping the property or buying to hold?

Colleague and PM me and I will be happy to break it down for you over the phone. I want all to see my tips but I want to make sure you don't waste any time.

You can send the bank comps but they really don't do much good. they pretty much stick to the BPO which is why it is absolutely essential that your or a partner, our your agent meets the BPO agent.

You can push for another BPO using those comps, but it will be a hard fight with most lenders. The best thing you can do if you are absolutely blown out of the water, is to cancel your offer, wait a week, and resubmit another offer under a different LLC. You should be assigned to a different negotiator and the monkeys at the bank usually have trouble putting 1 & 1 together let alone 2 & 2. This is obviously a last resort tactic.

To be honest with you I expect that I am not going to win the battle everytime even though we try our best. If the bank wants a number that I know "someone" will pay, I wait for that offer to come along and "substitute" the other buyers contract for mine to help the homeowner avoid the foreclosure.

Keep in mind I do not make offers on properties in the MLS (too hard to get control of the property and take over negotiations.) and I am working a large volume so I do not need every deal to work out in my favor.

HI Rich,

I just PM'd you.

The answer to this is simple. I have no competition when a seller has not already listed the property for sale. Realtors hate short sales and generally don't want to deal with them so they bring them to me.

I can negotiate with the bank to give me a discount anywhere from zero (that always sucks) to as much as 35%.

I do not close on the properties until I have found a buyer ready to purchase from me immediately. I use an "Option" contract allowing me to do business this way legally.

I never use my own money as transactional funders will lend me 100% as long as my buyer is ready to close asap behind me. This means I can buy as many as I can get my hands on.

I only own the property for a few days and make a great spread about 60% of the time.

For example I closed two deals last week. One I purchased for $200K on Tuesday, sold it for $250K on Thursday. The home appraised at $260K for the buyers lender. the second I purchased for $118K and sold for $140K the same day.

The short selling lender pays the listing agents commission and I pay the end buyers agent.

Not bad right?

Let me know if I can elaborate further.

Hi Will,

There is many moving parts to short sales, as such, there is many "systems" we use. I will lay out our process and hope that answers your question.

Almost all of the deals we are doing are word of mouth referrals. I am actually putting together my marketing plan now that I am ready to take on a much larger volume.
At first I did EVERYTHING and worked myself to death. I am glad I did now because it made me better and I honed my skills, which makes my current structure, much less stressful.

Now, the agents we work with go out to meet the homeowners on many occasions, get my contracts signed, and gather the financial docs from the seller. They deliver the package to my office and my assistant checks everything in, and requests anything missing from the homeowner.

She then sends the package to my negotiators office. Tip: Try to find a great negotiator early on, it makes a huge difference and you can avoid the brain damage of working with the lender yourself, which also frees up more time for finding deals, playing golf, and having fun with your kids (if you have'm of course.)

My negotiator takes it from there. When the BPO is ordered, Either my agent, me, or my biz partner go out to meet the BPO agent.

Once we get a counter from the bank (happens almost everytime) we determine based on comps and the number they would like us to be closer to, what we do next.

If we think we can get a good number, we counter back and at this point list the property in the MLS to find our end buyer. If the number is too high, we evidence to the bank why we disagree, and push for another BPO.

If the price remains too high, we wait until we get a buyer that makes an offer around where the bank wants and we "substitute" their contract for ours to get the house closed and help the owner avoid foreclosure.

If the price is good and we know we will make a profit once we find our buyer, we crack a beer and celebrate.

I was a lender for years and the last piece of our business is making sure that our buyer's lender has no seasoning issues (if they are not paying cash of course) and will go all the way to just prior to loan docs for us to take title.

We then close on the property, our title company gets an updated title prelim the same day over to our buyers lender and usually in a day or two they sign to close and we get paid.

Let me know if you have a more specific question that I can answer.

David is correct, my post is what you can do IF you are the one negotiating. If you made an offer on the short sale and the listing agent or someone they are affiliated with is negotiating, you will not be able to do this. However, many agents to not realize the importance of showing up at the appointment armed with the same information. So if this is the case, talk to the listing agent about whether they "show up" the their BPO's or not and if they don't share with them why they may want to start doing so.

Nothing worse than a BPO coming in at $200K on a property that NOBODY will purchase for more than $180K, especially if you are buying as an investor.

Hi Joe,

If you are referring to BPO's on short sale investing (buy and resell immediately or buy and hold) as opposed to making offers on short sales in your local MLS, then here is what you do:

Make sure you are the only person that the bank has for a contact for the BPO. I buy my properties in an LLC (for many reasons and I assume you do to), so if I get a call for a BPO, they are not aware they are talking to the actual buyer.

I do not list my properties for a flip until after the BPO is done and currently in my market, not until I am close to bank approval. This prevents the BPO agent form contacting the listing agent instead of me. I also do not put a lockbox on until after BPO as well and let my seller know that if they happen to get a call from anyone that wants to see the house, have them call me.

When you schedule the BPO, always show up, make sure homeowner will be gone, play the roll of property manager, give them realistic but lower end comps, the hardship letter, a list of known repairs needed, and a copy of the offer page of the purchase contract. This is called ethically influencing the BPO. Do not try to push this information on them, but strike up casual conversation and tell them you were asked to give this to them. Some will take it, others will hardly talk to you. If they won't take anything, at least point out the known repair issues.

Also, they want to be in and out and get on with the day so do not get in their way or talk TOO much. I always prefer phone conversation as so much can get lost in translation in email or posting. PM if you would like to speak directly on the phone and I will be glad to share more tips with you.