Friday, March 11, 2011

Creating A Short Sale Package

By Karen Larry


If you are starting to invest in real estate, short sales may be a good place to start. The development of the short sale package is commonly basic. After you have effectively negotiated the acquisition price with the seller , you may choose to contact the lender to get a good feel for what their short sale expectations are and how they would like to see the package. As the owner of the note makes the final decision on the deal, you should be in contact with their loss mitigation department immediately.

To get started developing your short sale package, find out from the property owner who currently holds the note on the mortgage. This may be challenging as a number of mortgages have been bought and sold and bought again. Regardless, in order for the deal to go through, you will need to be in contact with the owner of the mortgage.

Get in touch with the owner of the note and find out who their loss mitigation people are. Find out what the bank needs and expects in a short sale package as well as any specific details that will help the short sale purchase offer to be accepted.

After you conversation, go about developing your package. As this is a short sale, you will need to give sufficient proof that the home is not worth what is currently owed on the mortgage. To help build your substantiation, bring in appraisers and contractors to give an estimate to the cost of rehabbing the property. Get a true market appraisal from a certified appraiser for the property as well. This data, along with letters from the homeowner stating that they can no longer afford to pay the mortgage must be included in your short sale package.

The next step is simply to submit your short sale package to the lender and wait. It will now be up to the lender to accept the offer, or reject it based upon specific reasons. If you have created a thorough short sale proposal and your offer is sound, the bank should accept your offer. If they don't, simply change your offer and submit it again.




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