Realtors Specializing in Short Sales...

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[quote author="GOTTI" date=1216183113]I was wondering if any of the good folks at IHB could recommend a good Realtor that specializes in short sales.



Thanks in advance.</blockquote>
Short sales are a waste of time because 99% of the time the offers will get rejected by the 1st, 2nd, and/or 3rd mortgage holder. Your best bet is to wait until their is an REO because at that point the bank is motivated to move the property.
 
Thanks Trojanman. Forgive my ignorance but how do I follow the progress of a short sale to a REO?



The listing I'm interested in is listed at $1.3m. I think the property is valued higher than the listing price.
 
[quote author="GOTTI" date=1216187889]Thanks Trojanman. Forgive my ignorance but how do I follow the progress of a short sale to a REO?



The listing I'm interested in is listed at $1.3m. I think the property is valued higher than the listing price.</blockquote>
Typically when you see the total mortgage balance/s that excess the listing price, the property is in a short sale situation. There is a difference between a short sale listing and an "approved" short sale listing. In the "approved" short sale listing, there is most likely only one bank involved (either with a 1st mortgage or a 1st and a 2nd mortgage) and they have determined what price they are willing to accept (this will usually be listed in the "agent-to-agent" comments OR they'll counter back with that figure). PM me your e-mail and the MLS # or the address and I'll get you more information on the listing/property, including the mortgage information.



I've heard the success rate with short sales is very low (less than 5%) because the 2nd or 3rd mortgagee usually reject the offer/s because they will get nothing so most all the time it's better to wait until it becomes a foreclosure. I have personally negotiated with WAMU and Countywide on 2 condo foreclosures (representing myself as the buyer agent) that I bought back in April of this year and I can tell you that both banks where fairly responsive and motivated to move the properties off their books. It was the same case when I represented a few other buyers of Wells Fargo, BofA, and Impac REOs.



Most of the time, the seller (individual/s) will fall behind on their payments and once they get more than 90 days past due the bank/s typically file and record an NOD (Notice of Default) which I can see. Then there is a cure period that can range from 90-120+ days to the borrower to get current on their loan. If the borrower doesn't get current within that time range, then the bank will obtain a NTS (Notice of Trustee Sale). Once NTS obatined, the auction at the courthouse occurs in approx. 30-45 days. 99.99% of the time, the 1st mortgagee will be the winner of the auction by default (no other bids) and at that point they will eviction the borrower if they still occupy the property. Only when the borrower is evicted the bank will list the property for sale as an REO will an approved REO listing broker/agent. From start to finish the process can take anywhere from 180 days to 240 days or longer depending how quickly things move.
 
<em>"I have personally negotiated with WAMU and Countywide on 2 condo foreclosures (representing myself as the buyer agent) that I bought back in April of this year"</em>



Care to share details about these transactions? Have you placed them back on the market, resold them....or are you holding ?
 
[quote author="Trooper" date=1216202318]<em>"I have personally negotiated with WAMU and Countywide on 2 condo foreclosures (representing myself as the buyer agent) that I bought back in April of this year"</em>



Care to share details about these transactions? Have you placed them back on the market, resold them....or are you holding ?</blockquote>


It was one of his earliest posts: <a href="http://www.irvinehousingblog.com/forums/viewthread/2351/">Analyze my condo investment</a>



The lowest priced 3/2 in South Coast Terrace [del]Villas[/del] is current $142,000 in a petite 986sf. <a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/unit-409/home/5239729">Unit 409</a> A mere $145/sf. Bank REO, below Bank take back cost and a 2001 roll-back. The owner hit the triple crown!



There is also a 2/2 at $140,000 for 930sf. <a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/home/12077343">Unit 224.</a>



There are 24 units for sale in the complex.



<a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/unit-216/home/5239093">Unit 216 is also for sale.</a> It is a 3/2 at $150,000. Either a secret REO or a owner somehow willing to take <strong>over</strong> 50% for a loss on a 2005 purchase.
 
[quote author="Trooper" date=1216202318]<em>"I have personally negotiated with WAMU and Countywide on 2 condo foreclosures (representing myself as the buyer agent) that I bought back in April of this year"</em>



Care to share details about these transactions? Have you placed them back on the market, resold them....or are you holding ?</blockquote>
Sure Troop. The WAMU REO was a 3bed/2bath 1,120sf condo over by South Coast Plaza that I purchased for $215k with a $3k seller's credit. The CW REO was a 2bed/2bath 1,200sf condo in Las Vegas that I purchased for $125k with a $3k seller's credit. I obtained two 5% 7-year ARM interest only loans (10yr interest only period) for both properties. The properties are currently occupied with tenants and I plan on holding these properties for the next 7-10 years. I'm approx. $275/month positive on the WAMU REO and approx. $125/month positive on the CW REO (not including the tax benefit of the active real estate tax losses they throw off).



I've put in a few offers for short sale listings for myself as well as for a few buyers. Half of the banks took over a month to get back to me and the other half never responded (some of those properties have subsequently become REOs recently - BIG SUPRISE).
 
[quote author="No_Such_Reality" date=1216203825][quote author="Trooper" date=1216202318]<em>"I have personally negotiated with WAMU and Countywide on 2 condo foreclosures (representing myself as the buyer agent) that I bought back in April of this year"</em>



Care to share details about these transactions? Have you placed them back on the market, resold them....or are you holding ?</blockquote>


It was one of his earliest posts: <a href="http://www.irvinehousingblog.com/forums/viewthread/2351/">Analyze my condo investment</a>



The lowest priced 3/2 in South Coast Villas is current $142,000 in a petite 986sf. <a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/unit-409/home/5239729">Unit 409</a> A mere $145/sf. Bank REO, below Bank take back cost and a 2001 roll-back. The owner hit the triple crown!



There is also a 2/2 at $140,000 for 930sf. <a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/home/12077343">Unit 224.</a>



There are 24 units for sale in the complex.



<a href="http://www.redfin.com/CA/Santa-Ana/1001-W-Stevens-Ave-92707/unit-216/home/5239093">Unit 216 is also for sale.</a> It is a 3/2 at $150,000. Either a secret REO or a owner somehow willing to take <strong>over</strong> 50% for a loss on a 2005 purchase.</blockquote>
Yeah, there's the link. The 3/2 units in the South Coast Villas are 1,120sf and not 986sf. The property that you have listed is located at another complex off West Stevens which is off Sunflower and Bristol. South Coast Villas is located at 1001 West MacArthur near Bristol.



There are 5 REO 3/2 units listed for sale in South Coast Villas as we speak, ranging from $180k to $220k (the downstairs units are priced higher). I have looked at the REO properties and they are in HORRIBLE shape and need lots of TLC. I spent about $2k in freshening up my unit before I rented it out which took all of 1 week. There have been 3 closings of the 3/2 units since mid-May:



Unit # 48 - $212k in May 2008

Unit # 50 - $236k in May 2008

Unit # 38 - $230k in July 2008
 
[quote author="usctrojanman29" date=1216204776]

Yeah, there's the link. The 3/2 units in the South Coast Villas are 1,120sf and not 986sf. The property that you have listed is located at another complex off West Stevens which is off Sunflower and Bristol. South Coast Villas is located at 1001 West MacArthur near Bristol. </blockquote>


My bad, good catch. Corrected. There's a lot of complexes over there and the quality varies pretty dramatically.
 
[quote author="No_Such_Reality" date=1216206439][quote author="usctrojanman29" date=1216204776]

Yeah, there's the link. The 3/2 units in the South Coast Villas are 1,120sf and not 986sf. The property that you have listed is located at another complex off West Stevens which is off Sunflower and Bristol. South Coast Villas is located at 1001 West MacArthur near Bristol. </blockquote>


My bad, good catch. Corrected. There's a lot of complexes over there and the quality varies pretty dramatically.</blockquote>
No problemo. ;) Yeah, I looked at several condo listings back in the Spring and the quality of the interior varied from nice and clean with only little touch-ups needed to...well, let's just say you wouldn't want to live in it due to the destruction, smell, and/or mold. So the phrase all listings aren't created equally really due apply to those REO condos.
 
[quote author="kawakonohirukun" date=1216287377]usctrojanman29 Is this offer for advice open to all who would like more info on this? I would like to PM you as well. Please let me know.</blockquote>
Of course, I'm here to help whoever wants it. PM me with any questions that you may have.
 
We were involved in 3 shortsales so far, 2 were successful closing. What I heard is that success rate in short-sale was about 18% back in early this year. It might change by now. To increase your success, you got to do some homework before you waste your time and your realtors.



The most important item is to check on is THE LISTING AGENT'S KNOWLEDGE AND TRACK RECORDs. If you find out the realtor is green, don't waste time. He/she won't know how to prescreen the seller and the whole deal, won't know how to deal with the bank. Others like lien balance, position and asking price vs market price are only secondary issues to consider. Like any investment strategies, it takes consistence and persistence; you have better chance where others see it difficult.
 
[quote author="Informed_Decisions" date=1216381199]We were involved in 3 shortsales so far, 2 were successful closing. What I heard is that success rate in short-sale was about 18% back in early this year. It might change by now. To increase your success, you got to do some homework before you waste your time and your realtors.



The most important item is to check on is THE LISTING AGENT'S KNOWLEDGE AND TRACK RECORDs. If you find out the realtor is green, don't waste time. He/she won't know how to prescreen the seller and the whole deal, won't know how to deal with the bank. Others like lien balance, position and asking price vs market price are only secondary issues to consider. Like any investment strategies, it takes consistence and persistence; you have better chance where others see it difficult.</blockquote>


Where did you hear 18% success rate early in the year? I thought I recall it was more like 1% and is now closer to 5%?
 
Homeless Newbie - Keep faith in some of them



We put an offer on Jan 1 and finally closed the short sale on July 15th. Can you believe it? It could take upto that long or worse.



But all these 6 months+, we could not find another one that was as good as this one. So, we just waited but kept our options open. If it came through, we would take it. If it did not, big deal. But we did hire a private appraiser when we were getting ready to close to make sure that the appriased value was more than what we were offering. And it was. So we took the deal.



But the 2nd bank gave the seller's agent enough problem. He was very frustrated with them. Till the last day we did not have a signed agreement from the second bank. Any money made in a short sale usually goes to the bank that lends the 80 % - but in the case the 20% percent guy was negotiating with the first bank for like 4 months!! And was ready to write off if he did not get another 5000 dollars. so, these guys are horrible to deal with. Especially Citi Mortgage.



Hope that helps. So keep faith and keep looking. Dont get emotionally attached to the house - you'll feel very bad to see it go if you're not lucky.
 
[quote author="palomalove" date=1216432397]Homeless Newbie - Keep faith in some of them



We put an offer on Jan 1 and finally closed the short sale on July 15th. Can you believe it? It could take upto that long or worse.



But all these 6 months+, we could not find another one that was as good as this one. So, we just waited but kept our options open. If it came through, we would take it. If it did not, big deal. But we did hire a private appraiser when we were getting ready to close to make sure that the appriased value was more than what we were offering. And it was. So we took the deal.



But the 2nd bank gave the seller's agent enough problem. He was very frustrated with them. Till the last day we did not have a signed agreement from the second bank. Any money made in a short sale usually goes to the bank that lends the 80 % - but in the case the 20% percent guy was negotiating with the first bank for like 4 months!! And was ready to write off if he did not get another 5000 dollars. so, these guys are horrible to deal with. Especially Citi Mortgage.



Hope that helps. So keep faith and keep looking. Dont get emotionally attached to the house - you'll feel very bad to see it go if you're not lucky.</blockquote>


OK, so now I'm really confused. I thought that one of the biggest hurdles for getting a short sale approved was the 2nd holder not cooperating. If the 1st holder is agreeing to give them something, then it would seem wiser to take something rather than let it go to foreclosure where they are guaranteed to get nada. I know LawyerLiz says that banks are stupid. She seems like a smart cookie, but I just find it so hard to believe that banks are really that stupid.



Graph emphasizes that until the loan goes bad, it's still considered an asset. One thing I'm not clear on is whether they can still call it an asset regardless of how delinquent it is. If they sell it at a loss, then they have to take the hit on the books. However, it doesn't take rocket science to look at any of these loans requesting a SS and the value of the property combined with the borrowers ability to pay to come to the conclusion that a bird in the hand is worth two in the bush.



It sounds like Citi got lucky with Paloma's purchase because many of the offers received six months ago were offers based on the value back then. What I'd really like to understand is if the illogic of the banks is going to continue and if so, why?
 
[quote author="reason" date=1216451967]The banks/lenders are acting this way b/c they figure uncle sam will bail them out.</blockquote>


The housing bill was largely influenced by B of A, but it still states that in order to refinance under FHA, the principal has to be 85% of the current market value, which is still going to make any of these 2nds in the meltdown areas worth zilch AND leave the first holders with a loss. ??? I still think they would be smarter to take 90-95% of the present market value today rather than 85% of the future market value.
 
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