First of all I would like to thank you for reading my quick blog.
Let me start off by saying that this is not intended to give us a full description nor is it intended to walk you through all the complexities involved in the process. I am a real estate investor and my process works for me it also works for every single one of our coaching students. I notice that some agents may take a weekend class and get some sort of a designation and they start advertising themselves as a real estate or short sale experts.
They will get a client and the post the property on the MLS as short sale subject a third party approval, to then wait 6,7,8 months in hopes that a buyer will go ahead and make an offer on the property to then start the actual cycle......
Have any of you seen that before?
Have you experienced that before?
Have you lost clients because they didn't want to or couldn't wait several months to find out if there "dream home" is a pipe dream or a reality?
Do you want to Shortcut that wait time?
Do you want to make more per listing?
As an investor I have the luxury of submitting offers on every single property that cross's our desks and I mean every single property!!!
You have that luxury two because you actually have taking the time to read this blog and I thank you for doing so. What do I mean?? Use our money to Flip! And I mean Flip not borrow for months.
•- For real estate agents if you want to cut your short sale process time in half
•- For new investors if you want/need help processing your short sales
•- For homeowners that want an approved Short sale sooner than later
Below are the basics of what you're going to require
The Basics
What is a short sale? It is a transaction where a mortgage company agrees to accept a payoff on a property that is less than the actual amount owed.
What are the typical components of a short sale package?
Authorization to Release Information - This document is signed by the homeowner and authorizes the investor/Realtor to speak with the mortgage company on behalf of the homeowner. It is the first document you need in order to get the process moving.
Hardship Letter - This is a letter composed by the homeowner that explains to the mortgage company the circumstances that have led to the missed mortgage payments. The homeowner needs to make it clear that there is no hope of curing the default and a short sale is the only option. It is best if this letter is hand written, but a typed letter is fine. The letter should be at least one page long and be emotionally moving
Hardship Proof - These are documents that support the hardship letter explanation. For instance; a repossession slip, a layoff pink slip, doctor bills, death certificate, divorce papers, bankruptcy papers, police report, etc...
Financial Statement - This is a one-page document that states the monthly income and expenses of the homeowner. This includes food, utilities, clothing, car, phone, etc...
Bank Statements - Most mortgage companies will require the last two months bank statements for both checking and savings. They are interested in verifying the deposits and withdrawals against the financial statement.
Pay Stubs - Most mortgage companies will require the last 2-3 pay stubs to verify income. If the homeowner is unemployed, include a single signed document stating such and that pay stubs do not exist, if a GSE loan be prepared to document everything. Self employed 6 months P & L statement Signed
Tax Returns - The last two years federal tax returns are always required. Not the W-2 but the actual 1040 SIGNED!!!
List of Repairs - Let the mortgage company know what costs would be incurred to bring the property up to market value. An automated rehab costing tool can help provide professional estimates and you don't have to rely on a contractor to do all your estimates.
Listing Agreement - Mortgage companies always request a listing agreement; if you're a real estate agent doing the short sale for the commission, this is no problem. However if you're an investor, it would be better if the property wasn't listed in order to maintain profit margins. You'll need to convince the bank that a listing agreement is not needed since a purchase agreement is already in place you'll be further ahead.
Purchase Agreement - Have the homeowner sign blank purchase agreements so you can negotiate quickly and resubmit new purchase agreements immediately. A signed blank agreement means you'll only need to change the offer amount and date before resubmission.
Net Sheet - The Net Sheet itemizes all closing cost and provides a bottom line number the mortgage company would receive at closing. Mortgage companies will request a Net Sheet or HUD-1. Over 99% of the time a Net Sheet is easier to create will be accepted even if they demand a HUD-1. A HUD-1 will be provided just prior to closing and will be prepared by the Title Company or Real Estate Attorney.
These are the most typical documents in a short sale package, however there are others such as Economic Information, CMAs, Police Reports, Code Violations, etc... that can really help support your low offer.
I encourage you to PARTNER up with us!
What I won't take from you is your commission as a matter of fact I will most likely end up increasing your commission.
It's your commission not mine. I don't want your money. I make enough.
Some agents hear the word PARTNER and they get squeamish (did I spell that right?? Lol)
If you read this..... and simply are not interested in PARTNERING UP...... no worries. If nothing more just print out this blog and have the HIT LIST Printed and posted near your desk. I hope you get some use out of it.
Why go through all the stress and extra work of police records and so on.....you may ask.....
In my experience taking the extra 5 to 10 minutes to actually do a little bit of research on a property can yield you higher returns.
We do a lot of digging on every single property, we pull up police reports, crime statistics, demographics, trends, foreclosure forecast analysis, slope deprecations and MUCH MUCH MORE.... everything and anything you can possibly think of why.......
Because it helps in getting the greater discount on the property and when why you may ask again and there are a variety of reasons below are a few....
1. A greater discount means a larger profit margin both for me the investor and you our partner.
2. A greater discount is the greater the opportunity is to provide better incentives then your competitors.
3. What borrower wants the pay more?
Should you wish to get more information visit our website it it's a packed with useful information. All of our clients, agents, and partners have access 24x7 to their accounts to check on the process and the progress involved in the transactions they submit to us. I believe in transparency.
Our TM techniques do not effect property comparables (for the investors or agents that may be wondering)
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