Gerald Romine's Politically Incorrect News
Hey Friend,
Man oh man... have I got some wild information to share with you on my upcoming webinar where I will launch our new web site that will completely eliminate the need to attend short sale and foreclosure boot camps and seminars. Everything an investor or homeowner needs to know about short sales and foreclosures will be available for FREE.
You will be receiving your webinar invitation soon!
For now please enjoy and article from the site.
Necessary Short Sale Items From The Seller
When I first started doing short sales years ago I would meet with sellers to go over all of the details and gather all the information I needed. It literally took me hours to travel to the property and meet with the sellers. This is a valid approach and I encourage you to do the same, at least a few times.
As my investing and marketing skills improved I changed to a system where I conduct almost all business over the phone and use email, fax, and mail to gather everything needed for a short sale. This is the most efficient system I have found.
Irregardless of how you gather the information you should get the following items signed by the seller.
- Standard Purchase and Sale Agreement. You must have an agreement in place which gives you a legal interest in the property.
- Special Power of Attorney. This applies only to the property and gives you the authority to act as if you were the seller.
Lenders will typically ask you to complete an Authorization To Release Information(ATRI) which allows them to speak with you about the loan. I DO NOT encourage you to use ATRI's because a Power of Attorney forces the lender to deal with you as if you were the seller. The lender can not ignore you if you have a Power Of Attorney and must negotiate with you in good faith for a resolution, modification or short sale.
This is an advanced technique and I hope you see the importance of differentiation between the two.
- Agreement and Statement Of Understanding. You must have the seller sign an additional agreement that clearly states many things including that you will do your best to stop the foreclosure but are in no way making any promises or guarantees.This agreement should cover risks to the seller, your option to re-instate the loan to buy the property subject to, the possibility the property will be foreclosed upon, and hold harmless language protecting you. The exact Agreement I use can be found in this system.
- Warranty Deed (or Equivalent depending on state). This document conveys ownership of the property and plays heavily into the negotiations with the lenders.
This document IS NOT required to complete a short sale. However, by getting the deed to the property you now control ownership of the property which accomplishes several things. a) The lender realizes they will either work with you to get a short sale or the property will go to foreclosure. Having the deed is a power play. b) prevents the seller from ripping a deal out from underneath you after you have spent a lot of time and effort negotiating the short sale. c) gives you additional exit strategies including subject to.
While I may hold the deed to the property and mention it in the written negotiations with the lender I DO NOT record the deed unless there is a compelling reason to do so. Just remember you have the deed for negotiation and security. Rarely do you record that deed.
- Financial Statement. Every lender requires a Financial Statement to be submitted with a short sale package to show the
borrower(you) is financially unable to pay on the loan. This is an important document and helps show the lender why they
should accept or short sale package.
The seller should provide you the following:
- W-2's Pay Stub (Last Months)
- Most Recent Loan Statements
- Copy of Foreclosure Notice
- Access/key to the house
- Pictures of the house (email or mail)
- Hardship Letter
With this information you will be able to prepare and submit a short sale package to the lender. With our system you will be able to prepare short sale packages in less than 5 minutes.
Now Go Buy A House!
www.kickassrealestate.com
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