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Short Sale FAQs
Marketing for pre-foreclosure sellers
Q: I am currently mailing to homeowners who have received Notices of Trustees Sale and I am getting a reasonable response. However, a great deal of my mailings are being returned as undeliverable. Can anyone recommend a reliable source for verifying up-to-date address on people?
A: Sometimes, no matter how good your address is, we still can’t deliver the mail. For instance, your customer may have moved or the building may be vacant. By using special addressing services called "ancillary service endorsements," you can give the Postal Service specific instructions for how to handle your mail if it is undeliverable as addressed.
Depending on the purpose of your mailing, you may want those pieces forwarded to customers who have moved, or you may want a corrected address returned to you. Ancillary service endorsements include four basic phrases that are printed on the address side of your mail piece:
- — Address service requested
- — Return service requested
- — Change service requested
- — Forwarding service requested
Undeliverable mail is handled differently depending on the class of mail, the endorsement you use, and how recently your customer has moved. Some of these actions have fees associated with them and may cost you money.
Quick Service Guide 507d - Ancillary Service Endorsements
First-Class Mail is forwarded free of charge and, if undeliverable, returned to you for free. That’s really good value for your postage. You can use an ancillary service endorsement to change how we treat your First-Class Mail. Undeliverable Standard Mail that doesn’t have an endorsement is thrown away by the Postal Service. This is a good reason to make sure that your address list is correct and current.
TIPS
-- Before you put an endorsement on your mail piece, make sure you understand what service you will receive and what fees may be charged for that service.
-- Pay special attention to the "weighted fee" charge for Standard Mail endorsed "Address Service Requested" or "Forwarding Service Requested." This fee more than doubles the original postage cost and catches many mailers by surprise.
-- The best way to avoid undeliverable or returned pieces is to check the accuracy of your address list BEFORE you mail.
* Borrowed from USPS website
Q: I am wondering what has more success, a yellow sign with black writing - or white sign w/red writing? Also, what should it say?
A: I've always used black on yellow - seems to stand out more. Avoid Foreclosure or Stop Foreclosure plus number and website work just fine.
Just know that it is only a small piece of the marketing pie, don't expect miracles. However, one deal over the course of a year could make it well worth it!
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Dealing with Homeowners
Q: What are some ways to get homeowners out of their property with little hassle?
A: Some people have a difficult time getting the homeowner to move out. What I've found is that your ability and ease at getting a homeowner to move out is directly related to your approach with them.
Early on in my business, I tried my best to convince the homeowner that moving out is in their best interest. What I found was that I ended up arguing with them about what was best for them. I ended up feeling like the homeowner and I were not on the same team, and I did not like this.
I came into the situation to help the homeowner, not hinder their situation and complicate it. Realize that many homeowners will have already found a place to move to or will already have an idea of what they want to do. If their plan matches your plan, then just let it be.
If, however, they want to stay longer than it works for you, then you may want to have the following discussion. By the way, I try to coordinate for my homeowners to leave the property within a couple days after the BPO is completed.
This allows for the home to look as junky as possible for the BPO. Anyway, if they plan to stay or want to stay longer than I would like them to, my conversation goes something like…
"Bob, I know things are tough for you right now financially, and I want you to continue to live rent free for as long as possible so you can save up enough money to move on. However, it is easiest for me to sell your property vacant.
The good news is that I’m not going to start marketing this house hard until after your lender does an appraisal on your house, which means I don’t need it vacant until after the appraisal. After that appraisal is done, however, I really need to get this place sold, which means it’s best for the house to be vacant within a day or two after the appraisal.
I don't know when they will order the appraisal. It might be right away, and they might wait a month or two. I should know a couple days to a week or so prior to it being done. Will that be enough time for you to get moved if you can start today to just look for a place?"
If they still indicate that they will be living in the house, then I usually say something like:
"Bob, I'll do my best to get the house sold if you're still living in it, however it greatly reduces the chance of me being able to get it sold. Bob, it's your house and your foreclosure. I’ll do whatever you want me to do; I’m just telling you what I need to give this the best possible chance of getting it done."
Basically, I put everything on the back of the bank and the homeowner. I let the homeowner know what I need in order to help them avoid the foreclosure (a vacant house within a day or two after the BPO).
If they are not willing to help me, then I just tell them that they are decreasing the odds that this is going to get done. If you address this issue in the above way, I think you’ll find your homeowners working with you most of the time. You NEVER want to push them out of their house.
Q: Lots of homeowners don't want calls from the bank once they are working on a short sale. What can be done about this?
A: Homeowners get very good about knowing (with caller ID) when the bank is calling. They can simply stop answering the banks calls. If they want to answer, or if they happen to answer, have them tell the bank that they have their house sold. Tell the homeowner to give the bank your phone number and to call you.
Tell your homeowner that you can deal with the bank from now on and to send all the calls your direction. The homeowner will love you for it.
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Paperwork
Q: I have received the approval of the 2nd TD an affidavit of "Arm's Length Transaction" Stating that buyer and seller are not related and that the seller will not be allowed to remain in the property as a renter or regain ownership after the execution of the short sale. Is this something normal? I've never seen it before?
A: This is not typical, but you will see it occasionally. The lender is simply making sure that the owner isn't pulling a fast one. We've had them tell us that owners will create an LLC, and then try to do a short sale with the LLC as the buyer!
As long as you're not related to the seller, and you're not doing a buy/leaseback, you're fine.
Q: What contingencies must we consider having in the listing agreements to protect ourselves in the transaction? I believe one is "seller reserves right to approve and accept any offer submitted." Any other contingencies to consider?
A: You don’t need to worry so much about the listing agreements, other than to make sure you are in compliance with your local laws. If you have to disclose that a listing is in foreclosure or anything of that nature, make sure you do. You should certainly be up on your local legal requirements regarding listings.
In your purchase agreement between you and your buyer, there are several clauses that we use that are very beneficial:
- This agreement is contingent on SELLER (you) obtaining a discounted payoff in an amount that is acceptable to SELLER.
If you get a short sale accepted, but not one that's good enough, you should still be protected!
- This property is sold "as-is". Seller to do no work orders or repairs.
You can add this if you like. We do, and it really helps prevent buyers from asking for stuff.
- The closing date shall be extended 30 days (or whatever you want to put here) if required by seller, in order to facilitate a short sale.
With this clause, it becomes automatic if you want it. The buyer doesn't even have to sign an extension! We use this all the time.
The primary one is number 1. You can also reinforce that clause by adding "If seller is not able to obtain a short sale discount that is acceptable to seller, seller is NOT required to close this transaction".
Q: I used an "Option Contract" for the first time in my original SS offer and the lender has asked me to make a counter offer. Do I just send in an "addendum" to the original paperwork with a new HUD1 or should I submit a whole new "Option contract" with the revised price as the only change as well as the new HUD1?
A: Anytime you submit something to a lender, it should start out with the minimum amount required. In this case, send a cover letter with the new offer stated on it, and also a new HUD1.
If they want another option, simply make a copy of the original, white out the number and add your new price. As long as you keep the original, increasing the price should be fine.
Q: After doing some research on the county website about a deal I noticed that the records show that both husband and wife recorded with the transaction.
The guy said that he was the only one on the title and we did not sign the soon to be ex-wife. How does one find out for sure who is on title or not?
A: You need to have your title company provide a title search that will show who's on title. You can usually do something very simple before that though, which is simply getting on the county website and looking at the last deed that was recorded for that property. You need to be careful on this one, because sometimes a quitclaim can be recorded after the fact and not show up, etc.
A title report will tell the whole story, and if she is on title, you will need to find her and have her sign. Make sure you get her in the loop early in the game.
Although in some states, if a person is married, both the spouses need to sign the deed or land trust paperwork, EVEN IF BOTH ARE NOT ON THE DEED. So hypothetically, if somebody owned a property for 10 years, got married today and wanted to sell tomorrow, they will need both people to sign off on the deed.
Q: I made some mistakes on my HUD, being in negotiations with the bank still, can I put in a new offer with a changed HUD?
A: If the changes don't change the lender's net, just make the changes and submit a new HUD. If the changes DO change the lender's net, then sent it with an offer letter explaining what happened.
The worst they can say is no.
Q: I'm using options contracts for the first time, and I'm getting confused. My questions are - the option contract I use between my company and the person in foreclosure is the negotiating contract I use with the bank. Then:
- Do I use a new contract with my end buyer between my company and the end buyer?
A: yes. you are doing 2 separate transactions - buying and selling. When you seal, you will use a new contract between your company and your new buyer.
- Am I still doing a double closing?
A: Yes. still doing a double closing. -watch out for the seasoning issue with your new buyer! - this will bite you in the end if you don't address it in the beginning. make sure everyone knows that it's a double closing. your buyer may have to find a portfolio lender that doesn't subscribe to Fannie and Freddie guidelines.
- Can I avoid the double closing by just selling my "option to buy" on the contract between my company and the foreclosing person?
A: Possibly. remember, the lender's payoff letter will specifically state that no other buyer can be substituted. Can you do something creative like form an LLC or an entity that is the buyer, then assign interest of that entity to your buyer, sure if you want to go through all the hassle. additionally, will your buyer balk if your assignment fee is 25k?? if you do a double close, he'll never know what your profit is...
- What are some other ways to get this deal done?
A: You can get it done, you just need to follow all the steps correctly and make sure you don't miss anything. the option is not as forgiving as the trust, but it is also legally much safer, whereas the trust has been so abused that it is now being called into question.
Q: What documents are required to structure an option contract deal?
A: I use option contracts. Although the option has much less liability, you also give up some things when you stop using the trust. People are touting the option as the greatest thing since sliced bread, but there are some very specific issues that MUST be addressed to avoid some real big problems.
One of the newest issues is seasoning. when you go to resell your deal, their lender may have a huge issue with seasoning - which is nothing more than "time that the seller has been on title". Many want to see 6 months, and some even want a year! This creates a giant problem once you get to closing, as you can imagine.
Q: On your estimated HUD are you putting the loan balance of the lender on the HUD?
A: The HUD absolutely needs to have the payoff amounts that each lender will get. The HUD is actually one of the key negotiating tools, and this is how you show your numbers to the bank. The LM will always want to see payoff numbers on the HUD, and their approving manager WILL NOT move forward without it.
You don't actually put the loan balance; you put the actual payoff that the lender(s) will receive (what you're offering).
Q: When we're recording a deed or a memorandum of contract, I'm wondering how to handle the "legal description" part of the document that's being recorded?
A: I get the land trust and hold onto it until after the BPO and when I think the deal is going to get closed. After the BPO (if I think it went well), I give the land trust docs to the title company.
They pull the legal description and record the docs. That way, if anything was done incorrectly, they only have themselves to blame. :-) They do this for me for free, even if the deal doesn't close. Why? Because I do so much business for them.
Q: Could you explain exactly where at on the hud-1 do we put the commissions? is it on the 2nd page where it says commissions paid to? and do you list the agents name and company if that’s what the lender wants? Also where it says settlement agent is that where the real estate agent goes or is that where your negotiator goes? and if your negotiator goes there then where do you show their fee on the HUD?
A: Commissions go in the 700 block. Total amount paid in commission on line 700, then the amount that each broker is getting i.e. $6,000 to Re/Max Integrity on 701 and $6,000 to John L. Scott on 702.
Settlement agent is the closer. If you use a title company, it would be "abc title", etc.
The negotiator fee will go either at the bottom part of the 700 block, or you can put it in the 1300 block (less visible).
Of course they want to see where commission is being disbursed - that's money out of their pocket. It's completely normal, just make sure what you're putting down is truly accurate...
Q: Does it go case by case when it comes to a keeper or a house to be sold in using the deed or option?
A: If I were going to hold a house and take the 1st loan subject 2, even if I was shorting the 2nd loan, I would still use the trust. If, however, I was using financing of some sort and actually paying off all liens, I would use the option.
If I knew I was going to immediately resell, I would use the option.
It should be a case by case basis, and I think the trust still works well if used correctly, and depending on your state. I will certainly use a trust for any sub2 deals.
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Kick-butt Short Sale Packages
Q: What paperwork should I be sending to the lender for my short sale?
A:
- — Fax Coversheet
- — Offer Letter
- — Authorization to Release (we include it in the package even though it's already been faxed previously)
- — Purchase and Sales Agreement
- — HUD
- — Hardship Letter
- — Financial Form
- — Bank Statements
- — Pay Stubs
- — Tax Returns (without the W2s)
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Powerhouse Negotiating with the Lender
Q: I lost a deal because I didn't understand the position of the 1st lien holder. What is the position of the 1st lien holder to the second?
A: The first lien holder always has complete control, even if it's the second lien holder that's doing the foreclosure. If the second mortgage forecloses, they actually have to make sure that the first is paid off in full when the property is actually sold at auction or if they take it back as an REO.
Q: What if the 2nd lien holder wants a higher payoff than the 1st lien holder will allow?
A: Should a second mortgage holder want more than the first is willing to allow, simply buy the second mortgage, or pay the second mortgage the balance of what the first won't allow, outside the HUD. This does however, have to be disclosed on the HUD statement, and there's a specific way that it must be done.
Q: How Much Should I Offer The Foreclosing Bank On My Initial Offer?
A: First off, I determine what full retail value of the house is. Next, I determine what I can sell the house for quickly (30 day sales price). Next I determine what I want to buy the house for (meaning, what price I want to pay for the house).
Next, I determine where I need the BPO to come in at so I can buy the house at my price. Then I simply back the number down from there. When I get my number, I back down another $10,000 to $15,000 for negotiating room.
Q: In the current climate of many foreclosures do you find it effective to mail and fax the short sale package? Is it sufficient to fax a short sale package? when is an appropriate time to mail a hard copy as well?
A: We haven't mailed a package in over a year. It is rarely, if ever necessary. You have to remember; lenders are so hammered down and back logged right now, the chances of your mailed package finding its way through all the channels and into the loss mitigators hands are about 0%. You have to consider time too - 10-15 mins compared to several days or more.
Faxing is not only sufficient, it is the preferred method of almost all the lenders. Some even like it when you scan and email the package.
Q: I am thinking of making a lower offer on this home I have been negotiating for some time now, will the lenders find this suspicious?
A: We do that occasionally. The best time to submit the lower offer is just a couple of days after the BPO. You can state in your cover letter that you have done a more in depth inspection, and uncovered more significant issues with the property and this is why you're lowering your offer.
Q: What would you recommend saying to a 2nd lender who doesn’t appear to want to accept your deal?
A: If things just don't seem to be moving forward, it can be very useful to simply ask the LM what you both can do to get this done. "What can we do to make this work, knowing the 1st will not allow more than XX?" Many times they will tell you they can take a promissory note, or get paid outside the HUD.
Q: I can never get the loss mitigator assigned to my deal to pick up, or call back. What can I try to get some communication going?
A:
- Try calling from different phone numbers/ area codes. Use a calling card if you have one, it shows up as a different number.
- Try to get a hold of customer service and be transferred. "I was just talking to Mr. LM, and my call got dropped, can you please transfer me back to him?"
- Send a fax cover sheet and write a note to please call you.
- Send a fax cover sheet with HUGE bold writing saying that you can't make contact with him and to PLEASE call!
Q: I was wondering what are you usually seeing the banks pay to realtors? Are you adding a 1% loss mitigation fee to your estimated HUD?
A: We always ask for 6% commission and a 1% negotiation fee. What you'll find is that many times the lender will not want to pay the negotiator fee. Once in awhile they will, so you should always try. Just remember that that fee needs to be paid to a negotiator, should they decide to pay it.
One time we actually had them tell us they wouldn't pay squat! remind them that the agents are doing their job and deserve to get paid.
Q: What should I send to the lender when I receive a counter offer?
A: When I counter offer, I send a new offer letter, purchase and sales agreement, and updated HUD. I only send comps and an estimate of repair when I feel it will help to prove my case. I have found that the lenders typically will not take into account my comps and/or my estimate of repair. They have what they need from the BPO.
Q: I recently received an approval letter from a 2nd lender. However, they have nasty language in there about reserving the right to go after the shortfall balance, which is making my client upset. Can I get this language out of the letter? Do you ever go back and say "take this language out or the deal is dead"? or something similar? If yes, how successful are you?
A: This is a very important issue and certainly something that can cause problems between the seller and yourself long after the fact. It sometimes takes a year and a half for a homeowner to realize that they've received a 1099 or deficiency judgment on a property!
One thing you should always do during a transaction is bring up this deficiency judgment or 1099 in the beginning. Let the loss mitigator know that this is going to need to be waived in order for you to go forward with this transaction.
At this point, it's somewhat late in the game but you can certainly try it. I would be careful being so bold as to say" take this off or the deal is dead", because if they call your bluff, guess what...
what you can do is reason with them and ask them what sense it makes for the homeowner to go through with this when they can simply let the property go to sale.
You're all trying to work out something beneficial for all parties, and the homeowner is very uncomfortable going forward with verbiage like this in the payoff letter.
Many times you can get it removed, especially if you start early.
Q: Once the short sale has designated a LM--how often should we call them?
A: First off, I take a look at the sale date. How close is it? If it's one or two weeks away, I'll call the loss mitigator every day, preferably in the morning about 15 minutes after they open. You have a better chance of getting the loss mitigator on the phone right away in the morning when they have a fresh cup of coffee and they're not angry quite yet about their day. :-)
If the sale is still a month or two away, I would call once or twice a week and leave her a message every time. That way you can put your energy into other deals knowing that you still have time on this one. Once, however, you're only two weeks from the sale, it's now time to start calling more often.
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Managing the Property During the Process
Q: Should we list a property as soon as we get the deed? After the BPO? Or once we have a warm and fuzzy feeling that a short sale agreement is coming?
A: I'll give you two examples:
In Example 1 were going to want to actually use the listed property as a tool to help influence the BPO. In this strategy, what will do is have the property listed by the homeowner shortly after we get the deal going, but they'll also specify not to put it on the MLS until it's prepared for sale.
This works great because we can list it at a price that makes sense to us as far as influencing the BPO, then after the BPO were going to make sure the property is in cleaned up shape, adjust the price, and put it on the MLS.
Make sure that you have your agents check with their local MLS regarding rules about putting the property on the MLS once the listing is signed. This is an advanced tactic and should only be used with guidance from someone experienced who's already doing it.
Example 2 is the most common method. What we do here is what we call soft selling the property and we have it marketed with various marketing techniques that we use, but not listed yet. We do this simply because we don't want the BPO agent to see the property listed at a price that's going to influence the BPO in a negative way for us.
Should we get a buyer with our soft selling techniques, there is no need to list it. However, if we don't have a buyer by the time the BPO happens, we'll wait several days and then list the property as well as do a full-blown marketing campaign to sell it.
Make sure you wait several days after the BPO to list the property, just in case the BPO agent decides to check back on you. It wouldn't look good if you asked him to bring in the BPO at 200 and have the property listed at 259!
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Get That Thing SOLD!
Q: Still waiting for acceptance on FHA--can the property be listed on MLS now since it has to be with a realtor?
A: Bottom line is this; you should be doing everything possible right now to get the house sold. MLS, Craigslist, newspaper, pointer signs, flyers, door knocking, networking, etc. You need to be working your tail off right now to get this place sold. That way if the lender only gives you 30 days to close, you can still make it happen because the house will be under contract with somebody.
Q: Have you guys found a way around the seasoning issue using options since I'm fairly certain VA has the same seasoning requirements as FHA?
A: I've done some research, and it seems that there isn't the same issue as FHA when selling to a VA buyer. So far, I can't see that there are any seasoning issues with them.
Q: I am having great difficulty finding a Title Company in my area who will do a double or simultaneous close. Any Suggestions?
A: First off, I would network with other investors to see who they do business with. Maybe another investor can recommend a title company who will do a simultaneous closing. The local real estate investment club is a good source for this.
Q: What are some great strategies to find buyers right now aside from using the MLS?
A: One great thing to have is a selling website that has all of your properties listed on it. Have a fly in ad that the site visitor can sign up on, and then they'll receive notice of new properties BEFORE the general public! people love this, and your buyers list will grow very quickly.
Have a systematic method down for posting on craigslist and your local REIA website, if they have one. Make sure properties get posted every 3 days, and have the contact info drive them to your website, where your form will capture their contact info for your buyers list!
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Postponing a Foreclosure Sale
Q: What advice can you give me on postponing a sale? They want an offer immediately.
A: If a property goes to sale, everyone loses. One tactic is to offer them what they are asking to stop the sale and get a BPO ordered. Immediately after the BPO, submit a new offer that is lower and explain that you are doing so because you did an in depth inspection of the property and found many things wrong. This is an advanced tactic, use it sparingly.
Q: What are some advanced tactics to postponing a sale?
A:
- — We have one right now where it's an FHA and the lender is refusing to stop the sale. We went directly to FHA to get the sale postponed. We told the lender that we were going to do this and they said if we get a letter from FHA telling them to stop the sale, they would do it. So one tactic is to go directly to FHA.
- — The homeowner can, of course, declare bankruptcy. Be very careful about this, however. DO NOT TELL THE HOMEOWNER TO DECLARE!!! You can simply mention that you've had clients in the past who declared and it stopped the sale. It costs money to declare and of course it affects their credit score (not as bad as the foreclosure, however). It's the homeowner decision; you can just feed them a little info. But you're not an attorney, remember that when you're talking with them.
- — Follow up with the lender. Keep bugging them. Tell the gate keeper to e-mail or call or put you through to a supervisor. When you keep calling, you're eventually going to get somebody who can do something. If you get one "no" from a gate keeper, don't take that as the final answer.
Q: What excuse can we give for needing a new 30 day extension since, for purposes of the short sale lender we are still the buyer?
A: There are many possible answers to this, especially in times of financing crisis.
- — My/The Buyers loan program just got discontinued so we need time to get another loan set up.
- — There is an issue that appeared on title and we are working to resolve it (be ready to provide evidence!)
- — We found an issue with the property and we need to evaluate it further before closing.
- — You didn't get the payoff letter to us in time, so our loan lock expired and now we have to get a new one.
Be creative! Just be ready to back up what you say. Remember, the lender wants to get this done as much as you do!
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Special Topics
Q: Can you record a deed on a FHA loan?
A: When you read the final paperwork on an FHA deal, the homeowners have to sign a doc stating that they have not deeded the property over to anybody. When you do the land trust, you are not deeding it to your company, you're just deeding it into the land trust and the homeowners are still the beneficiaries of that land trust.
When they sign AND DATE the assignment of beneficial interest, THAT'S when they're effectively deeding you the property. That is why I don't have the assignment signed and dated until the day of closing, that way the homeowner can answer the question of "did you deed the property to anybody" honestly. When you close on their house, they deed the property to you, just like they would have with a warranty deed or anything else.
Q: What is the difference between "points" and "percentage" when talking hard money, or any kind of loans? Does the percentage refer to the amount charged through out the period of holding the loan until the loan is complete?
A: A point on a hard money or private loan is 1%. 3 points on a 100k loan would be 3000 dollars. 15% is 15 percent annual interest, so on 100k loan, it would be 15,000 dollars interest for having that money for a year.
A simple way to figure short term money for flips or rehabs is to take the total amount of interest for a year and divide it by 365. this will give you your interest per day or "per diem". It will really help you to calculate your costs if a certain loan is planned for 30 days or whatever.
Q: What paperwork should I have with me before I drill out the lender's lock in case the neighbors call the cops?
A: You need to either have control of the property (in a trust with guidance from trustee to remove lock), or have a letter from the homeowner.
Q: Been looking for a new lawyer, and have been running into questioning if they are right for me or not? What are some things that one should look for when finding a lawyer? It is amazing the different array of lawyers, does one need more than one?
A: For now, just one attorney will do. The one you want is the one that will close deals for you using either the land trust or the option, whichever route you plan on taking. I would ask them if they do double closings, if they use land trusts, and then show them your docs and see what they think.
I would also ask around to see how their customer service is. Usually a good place to start is your REI. Ask investors who they like and dislike.
The ultimate test is your first closing.
Q: I now know that FHA deals need to be owner occupied up until sale date or we have the approval letter from mortgage co... what about conventional loans---do we want the homeowners to get out ASAP?
A: You DO want the homeowners out ASAP. You need to be sure that you don't "make" them move, or tell them that they have to.
We just let them know that:
- They will need to move if this works or not, and it will be much easier for them to find a place before their credit is further damaged, and
- If we as the buyer don't get a price low enough for us to purchase as an investment, we will still try to resell and it will be much easier if the house is vacant and we can prepare it for sale.
Q: Should we consider all houses when getting started?
A: NO. Be picky about the deals. When you take deals out of desperation, they will turn out bad (some of them). Trust me, I've been at this going on 7 years, and when I would take a deal because I needed a deal - wow, I had some ugly ones.
Criteria:
- Good homeowner to work with
- House in an area that is selling (100 houses in a 1 mile radius with an average of 220 days on market is NOT good!)
- Not more that 105%-110% leveraged - max.
- A property that you can price effectively and make it highly competitive
- A property that you can make attractive (cosmetically or price) - an ugly fixer STILL needs to be prepped for sale. You can do this real cheap, really.
Q: What's the standard on FHA deals when it comes to closing costs and is there ever any exceptions?
A: FHA deals are usually very straightforward. you shouldn't have any problem getting them to pay 5-6%, since that is an expense of the seller. Be prepared to show a listing agreement, just in case. Also make sure you have 2 agents you can claim, just to cover the full commission/both sides of 6%, otherwise they may knock it down. They should be willing to pay any standard closing costs.
Q: When a possible deal comes, is there any bank that you avoid because they are hard to deal with?
A: Take on every deal, no matter the lender. Just realize that some lenders are going to be more of a challenge. For the more challenging lenders, just submit the information and don't kill yourself to get it assigned to a workout negotiator.
Realize that these deals may be "turds" that you just need to wait longer to cash out, and they may never cash out. If you're working "too many" deals and if you're just too busy, then pass on the deals. Most people are not in this "too many deals" situation, that's why I advise above.
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