All Forum Posts by: Dave P.

Ok,

That is good to know. The key to short sales is persistence. Loss mitigation departments are completely overwhelmed. They routinely lose files. Different people in the same department will have a different version of the truth every time you talk to them.

It is hard to explain how disorganized the banks are, until you go through it a few times. Here is the basic process:

1. Find a short sale prospect
2. Make an offer to the bank (and signed by the seller)
3. Negotiate with the bank. You will also need to negotiate for the seller. The bank will require the seller to "qualify" for the short sale. Some items the bank will require from the seller are: hardship letter, pay stubs, bank statements, tax returns, financial worksheet, etc...Many times, it will behoove the investor to help the home owner complete their home-work
4. The bank will order a Broker Price Opinion (BPO). This is a critical step. Expert opinions vary, but most agree that banks normally accept offers within 80% of the BPO value.

***Here is the neat part. The person conducting the BPO is sometimes a real estate agent and sometimes an appraiser. Either way, valuing property is much more difficult to do now-a-days. MONEY IS MADE ON THE BPO. Getting the bank convinced that the property's value is eroding is critical.

5. The bank will either accept or counter your offer
6. Proceed accordingly.

That is a very brief summary of the process.

hope it helps a little.

dave

Dan,

If this thread hasn't died, I will take a stab at your questions:

1. In a short sale, the bank is really the seller. They would pay seller side closing costs. Buyer side closing costs are obviously with the buyer side still.

2. PM me and I will send you a net sheet you can use.

3. From my experience, the EMD is not as important in a short sale as it is during a conventional sale. I would say something around 1% of purchase price should do the trick. The EMD should be held in a title company's trust acct.

hope this helps,

dave

Vegas,

I am a loss mitigator (agent) and meet with about 5 home-owners every single day to try and help them get out of their situation. I can tell you that there is serious potential in buying short sales and making money.

However, getting the deal closed will almost definitely require that you close on the deal first.

What is you preferred method of REI?

dave

Mike,

Thanks for the welcome. I work with many investors, but I am not a principle in these transactions.

dave

Christian,

I don't believe your comments are entirely true.

On the contrary, House Resolution 3648 prevents home owners from being taxed on forgiven debt. Obviously, there are some constraints, such as primary residence, no cash out refi's, etc...

Since I am so new to biggerpockets, I'm not allowed to put a link in the post. However, if I did, I would put in a link to the HR 3648 fact sheet which clearly states this.

I'm not trying to be anal, I just think it's important for investors and agents to be well versed when dealing with these matters.

thanks,

dave

Hello All,

My name is Dave and I am an Agent in Florida. I specialize in loss mitigation (short sales) and I thought this might be a cool place to hang out and learn.

Look forward to spending some time here.

dave

Todd,

Just a couple of questions:

Are the properties under contract?
Have the banks agreed to sell them short?

thanks,

dave

Vik,

This is my first day on this site and I promised myself that I wouldn't post, but oh well. I am a Real Estate Agent that specializes in loss mitigation (short sales) in Florida.

I think the response that you are witnessing from agents is a blend of frustration and lack of education/skills to deal with what you are asking them to do.

In my opinion (and obviously it's biased!), is that you should find a good agent that knows how to close deals.....OR.....learn the short sale process yourself.

In general, Real Estate Agents are not equipped with the knowledge or skills to do these transactions...you need to look hard to find a good one that can.

dave