Short sale florida pre foreclosure short sale short sales - Jim Costello

When you are starting out interviewing prospective clients and properties to work with on your short sales, do you ask up front who the lender(s) is? It is extremely important to know which lender you will be working with and I will explain why and let you know who the good ones are.

In my opinion, this is the most important fact on whether you want to take on a particular short sale. In fact, it is probably the most overlooked portion of the short sale process. One short sale that does not go through could cost you up to 100 hours of time invested. Time spent includes meeting with your client, gathering the financial paperwork to submit to the lender, marketing for a buyer, status updates with your client, calls to the lender - think of the countless times on hold for status updates, client status phone calls, and possible counter offer/resubmissions to the lender. There is what economists call an "opportunity cost" that is lost and this can definitely pertain to negotiating short sales. This simply means that the time you spend negotiating/working the short sale could cost you a more profitable deal because you missed that transaction due to your involvement in another transaction.

It is an extremely important use of your time to know what you are getting yourself into in the beginning of a short sale transaction. So, knowing the lender you are working with is extremely critical to a successful outcome of the negotiation. Lenders - once you know them, like people, tend to operate in a predictable manner. So, do you know if the lender you are working with takes a discount off of market value on their short sale and how much? Does that lender require the borrower to sign a promissory note for the deficiency balance? Will that lender let you counter offer if they do not accept the original offer? If so, how many times? Does the lender have to get a secondary approval from an MI company or investor, like Fannie Mae?

If the property is discounted 15% to account for the short sale and the lender only allows 10%, your buyer may not want to proceed. In particular, Bank of America is a lender who discounts their property 10% off of market value. And make sure you are fully prepared to persuade them as to what market value truly is.

The following lenders tend to want your seller to sign promissory notes - Bank of America, Regions Bank, Wachovia Bank - and explaining that up front, including the implications of a promissory note is critical. If it is brought up near the conclusion of the transaction, it could make a seller balk. Handling it up front will let you know if the seller is willing or not to sign it and will determine if you want to proceed with this seller.

Lenders like Aurora will close out your file after one counter offer. After that you have to submit a whole new file. The good news with them is they will tell you how much they are looking for on a counter offer.

Having another investor to deal with besides the lender is critical information that could make or break your deal as well. If you are working with an impatient buyer or seller, the expectation level needs to be set up front with them as far as the time frame necessary to close the transaction. Telling them it will take 2 months when it winds up to be 5 months (or more) could make all of your efforts wasted if the buyer walks or the seller gets frustrated with the process. This is because when there is another investor like Fannie Mae or Freddie Mac, more than likely they will want 2 Broker Price Opinions (BPO's) and of course a second approval is needed.

So who are the good lenders to work with and who are the difficult ones that we have worked with? Good question. Here is the list:

Un-motivated Lenders:

•· Bank of America -Countrywide

•· Regional & local banks - i.e. - Century Bank, SunTrust, Wachovia, Regions Bank

•· Carrington Mortgage

•· Flagstar (because they go after the deficiency balance)

Motivated Lenders:

•· Wilshire

•· HomeQ

•· Litton

The list is updated continuously as sometimes difficult lenders can change to motivated ones.

Jim Costello, Buyer and Seller of short sale properties

813.785.8602

A lender turns down your short sale offer and says to raise it, what are you to do?

The first thing to keep in mind is the banks position if the property goes back to them in a foreclosure. The bank must deposit an equivalent amount of money into a loan loss reserve account when they take back a property. By doing so, they are depleting their capital. As their loan loss reserve accounts add up, the bank becomes less liquid, losing their capital reserves, which could force them into insolvency. So your position of strength is that the bank does not want to foreclose. Your job in presenting that offer is to show that it is in the banks best interest to accept your offer. So how do you do that? You show them why their counter offer is too high.

When submitting your offer, make sure you calculate an offer of 80% of the value that you come up with. Lenders are discounting properties before repair costs at least 80% of the true value. This is the value that they expect to get if they were to "quick sale" it in 30 days or so. A short sale negotiation could go on for months or longer. During that time there could be lower comparable sales on the market. Find the most updated and lowest comps you can find and send them to the lender. Pay particular attention to the days on the market on how long it took that comp to sell. Point that out to the lender. If a comparable property took 210 days to sell, then that would justify a lower offer than that comp. The lender should be looking at a valuation based on selling a property in 30-60 days. This will be a "quick sale" price that the lender should agree to. Always keep this in mind.

Another negotiation strategy is to present them with a home inspection that shows every single thing wrong with the property along with an estimated cost to get that property in excellent condition. That cost is deducted from your market value, which is 80% of the 3 lowest comps. So for instance, if you have the 3 lowest comps averaging to be $100,000, multiply that by 80% to get $80,000. Now subtract out your cost of repairs. That should be your reasonable offer in which to give the bank.

Finally, the bank is negotiating to get the highest price for them as well. They will tell you anything to make that happen. I had one bank tell us that their BPO (brokers price opinion) came in at $245,000. It just so happened that my negotiator knew the BPO agent. She called him and he told her what the true value was. Surprise! He valued it at $210,000. So, the moral of the story is, stick to your guns because sometimes bankers lie.

Jim Costello

813-785-8602

Investor and Short Sale Specialist

P.S. – Ask me how I can buy your short sale listings, negotiate your short sale and pay you 10% commission.

Short Sale, and foreclosure negotiation on a second mortgage when the second lien will not release the lien without a promissory note from seller.

The second mortgage holder is in a very "weak" position. This is why the first mortgage lender will typically dictate to the second lien holder how much they will get and usually it is a very small figure, sometimes $1000-$2000. They (the second lien holder) stand to gain nothing if the property goes to foreclosure. Typically you can get a second mortgage holder to accept 10% or less of the original note balance. You do not need to start negotiating with the subordinate lien holder until you have approval from the first or if you are close to getting that approval.

The reason why the bank wants a note is because it makes the banks balance sheet look better to Wall Street and its investors. It shows up as an asset. Here is what we would do in a situation where the second lien holder wants the borrower to pay a promissory note after closing for the deficiency. Do your own Comparative Market Analysis (with the lowest comps) and send it to them with pictures of the property (showing it in the worst light, ie. - photos of mold, rotted wood, repairs needed). If they still insist on having the borrower pay the deficiency here is what you are to do. Explain to the seller that they will get a deficiency when the property goes to auction and if it goes to auction, they will have a foreclosure on their credit and this is a much worse situation than having a short sale on their record. It is in the seller’s best interest at this point to sign the deficiency. The unsecured promissory note is just like a credit card they are not paying. You can offer to negotiate the note for them in a year and the lender will take 50% of what is owed. You can explain to them that you have heard of other borrowers in their position file a Chapter 7 later on to have this unsecured note discharged in Chapter 7 bankruptcy. The reason why you would not tell them to file a Chapter 7 directly is because that is practicing law and you need to be a licensed lawyer to practice law.

As far as what is an appropriate price/discount on a short sale when listing a property, there are several factors involved. Keep in mind the bank is trying to get the maximum amount of money. Negotiating the price is where the expertise in short sales of the person handling it comes in. The bank wants as close to market value as possible. Each lender is a different animal so to speak. With that said, this is what we shoot for on a final negotiated price from the lender (obviously the initial offer is much lower). We find the 3 lowest comparable sales in the area - these are usually closed bank owned, short sales and foreclosures. You would take the average price per square foot and times it by the square foot of the subject property. Take that figure and multiply it by 80%. 80% of the value is a "quick sale" price that banks recognize as what it would take to sell the home very quickly (30 days or so). We then have a repair estimate for repair costs of the property and subtract that from the previous number. That is our maximum price we want to buy that property for. Our offer price is much lower than that.

Jim Costello

Investor and Short Sale Specialist

P.S. – Ask me how I can buy your short sale listings, negotiate your short sale listings and pay you 10% commission.

Tampa Short Sale Properties Purchased 

Realtors, do you have short sale homes for sale in Tampa or anywhere in the United States?? 

As a short sale specialist we buy homes that are in short sale or facing foreclosure. 

The home seller options we offer are available for short sale properties all across the United States for folks who are facing foreclosure.   The benefits to you and the homeowner are numerous.  For starters you will earn double the commission, up to 10% and no lower than 3%. Do not let the bank give you less than full commission, we pay more than full commission. We look for homeowners who are facing foreclosure or owes more than the value of the property and this offer is made within 24 hours of talking with you. The next benefit to you is that you do not have to spend countless hours on gathering paperwork for the short sale submission, chasing down the seller for missing documents and making phone calls the bank.  Not to mention the added frustration of working with a bank who doesn't return phone calls promptly.  Do what you do best, which is selling, instead of shuffling paperwork.

Benefits of Tampa Short Sale Solution Program

The benefits to the property owner are many.  Your home seller will have an offer submitted to the bank right away (as soon as we have their short sale paperwork).  With an offer in hand, the lender will want to talk about the short sale situation. Your home seller doesn't have to wait months hoping that an offer will come their way and may never get one, we make an offer right away.  We will negotiate that the bank settles the debt for less than what is owed and not report the account in their credit profile as a foreclosure. Since it is classified as a short sale, they are avoiding a foreclosure.   As you may know, a foreclosure prohibits them from buying a home through Fannie Mae for at least 5 years. A short sale will eliminate that problem.  We will also negotiate with the bank that they do not enter a deficiency judgment against the seller (not a guaranteed in all cases).  Knowing that the bank will not go after them for a deficiency judgment is a huge benefit. An unpaid judgment follows them around for 20 years. The creditor can attach this judgment to assets that the borrower has now or any that are obtained in the future. However, if the bank does want the seller to sign a promissory note, we have additional remedies

For further information, email or call Jim Costello specializing in Tampa investor and Tampa Short Sales  at 813.785.8602 cell.

Tampa Distressed Properties Sold

Tampa short Sale or foreclosure, investor buy houses and saves your credit. Right now as you may know, a record number of homeowners are facing foreclosure with no option for them to avoid ruining their credit or having their assets seized, including other assets besides the home itself. However, there is a solution and it doesn't involve bankruptcy. I represent investors who are willing and able to buy your home, even if you owe more than what the home is worth! Do not let a foreclosure ruin your financial situation! However, before I explain the program, I will let you know the consequences of a foreclosure.

The bank will file a Lis Pendens in the county the property is located in. You will also receive the notice. A Lis Pendens is a notice to foreclose. You will have a specified time to answer the claim, usually 20 days. After the waiting period is up, the bank proceeds to place the house up for sale at the courthouse. The bank will usually be the high bidder to protect their interest in the property. Once the property comes back to them, it goes to their Real Estate Owned (REO) department. This department is in charge of disposing the asset. Once the asset is sold, the bank will issue a deficiency judgment. A deficiency judgment comes from taking the amount you owe on the loan, plus attorney fees, late fees, court costs, interest and penalties, subtracted from the amount the bank sells it for. This usually adds up to a lot of money. The bank will then go after you for the deficiency amount. If you do not have the money to pay it, then the bank will attach the judgment to other assets that you own. This could force you to file bankruptcy. A Chapter 7 bankruptcy will stay on your credit for 10 years and a Chapter 13 will stay on for 7 years. An unpaid judgment stays on for 20 years and is renewable for another 20 years at the discretion of the creditor. Under current Fannie Mae rules, a foreclosure will disallow you from buying a home for 5 years. If you have other assets, the trustee in a Chapter 7 bankruptcy will liquidate them to satisfy the deficiency. In a Chapter 13 bankruptcy, you will have to make payments to your creditors based on the assets that you own.

How do

Tampa home owners avoid a foreclosure

and a deficiency judgment? Let me explain briefly how my short sale program works. My investors will buy your home regardless of where the property is located, condition or if you owe more than what the house is worth. My investors will place a contract to buy on the home right away. My team of seasoned professionals, which include attorneys, title companies, appraisers, loss negotiators/mitigators, and mortgage professionals have over a combined 88 years experience. They will handle the negotiations with the bank to allow the bank to sell the home for less than what it is worth. Part of the negotiations is that we insist that the bank will not file for a deficiency judgment. We also negotiate that the account will not show up as a foreclosure on your credit report. As part of the negotiation, we insist that the bank will show the account as "settled for less than what is owed".

For further information, email or call Jim Costello specializing in Tampa mortgages and Tampa Short Sales at 813.785.8602 cell, or work 813.988.1776 x701.

If you are reading this and you are a Tampa Property Investor or home buyer interested in getting a Tampa real estate bargain - give us a call as well and we'd be happy to match you up with these property bargains!