Real Estate - Can we talk short-sales?

[Smokin Gator]

Andrew, as the old saying goes, money talks and BS walks. I can tell you for sure that the larger you make the earnest money the more it gets their attention. However, DO NOT give it to them until the bank signs the short sale addendum. That puts the ball in their court. If they are going to get with the business fine. If they aren't there is no need to give them a penny.

[AD720]

Brent, thanks a bunch for the advice, it's much appreciated.

[MiamiE]

It is a pain in the ass. I went through this crap a year or so ago, and wont do it again. A lot of what has been said, I wish I had read a long time ago. Point being, they did me a HUGE favor. I didnt buy, and wont buy for the foreseeable future. The market in Florida hasnt hit bottom yet, and I was going to be stuck in something still depreciating. Brent I am assuming you're buying properties as investments. You have more experience than me, but why not put a little less down payment and take the hit on the interest rate, being the property wont be around in 5 years. Assuming your plan is to renovate, rent, and flip. If not, disregard.

[jmsremax]

Originally Posted by MiamiE

You have more experience than me, but why not put a little less down payment and take the hit on the interest rate, being the property wont be around in 5 years. Assuming your plan is to renovate, rent, and flip.

This is how we got into this mess in the first place. People got stuck with properties for longer than they anticipated and ended upside down or in foreclosure.

[Smokin Gator]

Originally Posted by MiamiE

Brent I am assuming you're buying properties as investments. You have more experience than me, but why not put a little less down payment and take the hit on the interest rate, being the property wont be around in 5 years. Assuming your plan is to renovate, rent, and flip. If not, disregard.

E... I don't buy to flip. In fact I have not sold a property since 1984. We buy them cash, do any renovations that need to be done, and then rent them out.

[MiamiE]

Jon I know a few investors who live by this philosophy. I think a lot of people got into ARM's, not for investment, but for primary residence without really having an idea what was ahead. Anyways I am not talking about an ARM, I am talking about 0-7% down, and a higher fixed rate. Not to mention, the example I am using is someone with existing assets, and great credit. Kind of makes sense. Less money out of pocket, and who really cares about the interest rate if you won't own it for very long. These people are still making money nowadays, at least down in this horrid market. Regardless if they finance or buy cash.

[jmsremax]

Erick, there are many people who live by this rule and have been very successful and I know others who lost everything. Some were using ARMs others weren't. There are so many variables that can play out and cause a snow ball effect (i.e. landlord or tenant(s) losing their job and can't pay their obligation). Unfortunately both investors and home owners were getting themselves into ARMs because lenders were basically giving them away at the time.

I just get tense when I hear people talk about low down payment, higher interest rates mortgages....it just causes flashbacks to 2008.

[MiamiE]

I totally understand Jon and I have no personal experience. I am just trying to get a feel for what I have seen others do. Thanks for clarifying!

[MiamiE]

Gotcha! I knew I didnt know what I was talking about.

[mosesbotbol]

The most basic principle to remember if an investment property "can I cover the mortgage and condo fee with the expected rent if rented out?"

Short sales are difficult in my area as there are many fat cat's that get first go on them. Makes sense to preview to bonafide wallets first.

[AD720]

Well thanks for all the input guys, had a great talk with my buyers agent and we are going to put an offer in with a 30 day window contingency on it so we are not tied up for months and are going to have the contact looked over by a real estate lawyer.

Cross your fingers and toes for us.

[Smokin Gator]

Best of luck Andrew!!!

[mosesbotbol]

I heard there are banks sitting on so many properties that they have a 10 year plan to slowly release them not to flood and de-value the market.

If anyone is interested in short-sale or foreclosure in the Boston area, my friend works for one of the largest Real Estate law firms locally. He has an inside track on many, but he lacks investors who can sign a check in short order.

[SvilleKid]

Originally Posted by mosesbotbol

I heard there are banks sitting on so many properties that they have a 10 year plan to slowly release them not to flood and de-value the market.

Unfortunately, you are 100% correct in the huge inventory story. It is a big worry for many related industries as well as the federal government as to what will happen when the economy turns around and these homes are released on the market! Unless the banks want them as a drag on their spreadsheets forever, they will probable be released for sale at a quicker rate than the market can absorb. I've been on the bank's side of this in the early 1980's, responsible for (at the height of that recession) foreclosing, valuing, repairing and selling over $40 million in OREO (Other Real Estate Owned). But that amount is nothing compared to the lender-owned ORE out there today. Scary, at the best!

[billybarue]

Any recommendations on the best resource(s) to find short or foreclosed residential real estate in any specific location?

[forgop]

Originally Posted by billybarue

Any recommendations on the best resource(s) to find short or foreclosed residential real estate in any specific location?

Before I bought my house a year ago, I really wanted to consider foreclosures and short sales. Problem is that there are a lot of sharks in that segment and getting any information on listings online requires subscriptions from what I could find out.

[althekillr]

the deal with short sales it to make sure your agent and the listing agent knows what they are doing.

what you have to do to get a good deal is to prepare the bpo for the bpo agent (brokers price opinion). what is happening now is banks are paying out of work agents 45 bucks to go and give a value on a house. its essentially a summary appraisal with active comps as well. These bpo agents have to drive, take pics and prepare a report. 2-3 hours of work. what some people will do, especially if you agent has bpo experience, is to prepare the whole bpo for the agent coming out to the property, hand him a cd with the bpo and the pics, and meet him at the property. tell him that we have done all your work for you and talk the lingo so he knows the bpo is good. "we used recent comps" "we made sure to include the address verification pic, street view pics" etc etc and he will know he's got all his work done for him.

And you have to research the loan situation ahead of time before making offers on short sales. certain ones you know will not go through. ex. heloc, credit unions, private money loans etc. and you don't have to waste your time on those. multiple loans are workable as long as the agent knows what he is doing and we know who the lenders are. and preparing mulitple huds correctly so there is room to negotiate etc.

just find an agent that can verify he's closed a bunch of short sales and it should help.
short sales nowadays are easy as long as you don't go after the ones that have no hope, and the realtor on the listing and buying side know what they are doing.

a CDPE agent probably gives them some sort of knowlege though by no means they are an "automatic expert".

any questions pm me.

[AD720]

Thanks for all the advice guys - our offer goes in TODAY so cross your fingers and toes for us.

[AD720]

Well it's been a wild ride but our offer was accepted! Last week acutally. Our real estate agent, mortgage rep and insurance rep are all basically saying this is the fastest short sale they have ever seen.

Anyway we had a very good home inspection last week, overwhelmingly positive with only some very minor issues, nothing we can't handle so along we march to closing.

Thanks again for all the info guys!

[mosesbotbol]

Originally Posted by AD720

Well it's been a wild ride but our offer was accepted!

Any pictures?