|
9 Steps to doing
Short Sales:
The following is a brief summary of how to do a
short sale.
#1. Find a short sale candidate. Find motivated home
sellers. Some work better than others and with short
sales you basically need to find homeowners who have
little or no equity, no alternative to foreclosure
and are willing to take a chance. Make no mistake; a
short sale should almost always be attempted when
the homeowner has no other choice. It is a great
alternative to foreclosure and bankruptcy.
#2. Get an authorization to release information.
Wow, it sounds like a really complicated thing
right? Not quite, this is just a piece of paper that
states that the homeowner(s) are allowing you or
your company to access information on the loan. You
will need this to contact the bank and get the ball
rolling. A word document with their name, address,
loan #, social security #, date and signature is
sufficient. Some banks have their own they want used
so get one from them and copy it and use it for your
other deals.
#3. Get a mortgage statement from the homeowner with
the account # and balance owed. The balance will be
an approximate because the bank will no doubt have
added attorney's fees and late fees not on the
statement. The homeowner many times owes thousands
more than they think.
#4. Call the bank. This can be a hard part; you may
sit on hold for as much as an hour. It takes immense
amounts of patience and it can be very hard to not
tell the person who finally answers the phone just
how you feel about their hold policy, you must
resist. When they do answer, ask to speak with the
loss mitigation department or whoever can give you
their requirements for a short sale package. Have
them fax or mail these requirements to you or the
homeowner as soon as possible.
#5. Gather the documents needed. A short sale
package will usually be very specific in what it
wants and self explanatory. Follow their
requirements to the tee, do not add anything that
you may think they want because they don't. It is
extremely important to give them what they want and
that's it. Get it together and fax it to them now.
#6. Follow up. Once the package is together and
faxed to the bank's loss mitigation department
follow up with a phone call to see what kind of
processing time to expect. It could be weeks before
it is even assigned to a loss mitigation negotiator,
ask and they will tell you.
#7. Order a BPO or appraisal. Once your package is
in the right hands, call and request a Broker Price
Opinion or appraisal. This is done to give the bank
an idea of the value. When they come out, meet them
there and give them some bad comps. Any good
investor knows how to pull comparables. Find the bad
ones and hand them to the appraiser or broker, this
can do wonders. Remember to kiss a little ass, this
can also do wonders. Tell them what you are doing,
they understand, show them a picture of your kids,
level with them. They know what a short sale is and
they know you need to make a buck.
#8. Negotiate. Once the BPO is received by the bank,
call and check the status. They may or may not tell
you what it is, but asking definitely won't hurt.
Once they have all these things they are ready to
say no to your short sale offer, and they will. What
ever you have offered them will surely be rejected
(unless you made a high offer and you will know this
if they accept off the bat) but that's when you
start negotiating. Negotiating is on you. It can be
a science or you can just lay it all out and be as
honest as possible and hope for the best. You will
be surprised what you will get by just asking.
#9. Win or Lose. Either they accept it or not. If
they do, buy the house at a great discount or flip
your contract to another investor. If they don't,
move on to the next. Don't waste time, short sales
are a dime a dozen in this market and the homeowner
needs to know ASAP so they can make arrangements.
|
