What do you think about disclosing the 1st mortgage amt in a short sale listing??
I just lost a listing to the "Steps." It had a 475k 1st and a 150k 2nd. The best offer I got was 525k, the previous lowest sale in the neighborhood was 625k. I listened to another agent and did not show the 1st in the "private remarks." I think I screwed up. I should have showed it, looking for a 600k offer which I could have worked. I could not list it at anything, I could not pay off the banks with, so I had it at as a "short sale" listed at 700k "very negotiable."
I could not believe I could not get an offer; my other 2 listings in the same s/d are priced at 800k.
What do you think??

In thinking about it, if it is legal; I wish more short sale agents would disclose the 1st, because it would allow the selling agent to make reasonable offers that could be worked. The banks (2nd) are usually very realistic; it is the clients that are not.

Man it sounds like you know nothing about short sales at all.

1st mortgage is in senior lein position,2 mortgage often wants a high payoff 40k for a 100k note.Senior mortgage says we will give them 1 to 2k to accept the short sale and if they don't we will foreclose and wipe out ther position.Usually the first always wants to know in writing what the second will accept before considering a short sale.

Short sales are very complex and 80/20's are the hardest to short,it doesn't look good for your listing.Don't make the seller false promises just say it's up to th ebank to accept and do your best.

This used to be all I would do is short sales.If you have a specific question ask but I don't feel like writing a book ont he subject.

I know a little...did not need the comment.
The questions was "can I put it in private remarks what the 1st is.
As far as your response; 2nd said they would take 50 cents on the dollar, but would not waive the deficiency judgement. It is in a irrevokable trust, so enoforcement is going to be interesting. 1st had no reason to budge as they will get full value at auction, the question is how much junk fees will they add on. I had 50k past the 1st; but I have to pay at least 16 k in commission to the selling agent. Gives me 34k to work with. Owe 7500 in taxes plus prorate so make it 10 k; now I got 24k less hoa and who knows what else and I have not paid myself. But as you say, I am not worth much.
As far as the 2nd's accepting 1 or 2k; you are either dreaming or sell very low end property. If they won't waive the D.J. and they won't for 1 or 2k.
Mr Super Realtor; be a little nicer next time; you are the guy that I had to tell how to find a listing date on a listing. I thought about it before I did thinking I really want to compete for business with you in a knowledge deficit position; but my better nature got the best of me and I posted the answer to your problem without the "Man it sounds like you know nothing about BPO's at all."

The bottom line is if the first is made whole they don't care what the second gets in the transaction.The first isn't going to say hey mr.second we will give you 50k to make you happy out of the proceeeds the first loan was going to get to release your interest.They will tell them to take a hike as GA being a non-judicial foreclosure state costs only a few k to foreclose on average.

You don't have to put in agent remarks that ther eis a first or a second only that:This is a short sale subject to bank-lender-servicer approval,commission is subject to the banks approval.

No matter what is in the listing agreement the bank is calling the shots.When submitting the short sale you have to include your commission on the pre-lim hud-1 because if the bank approves and it's not on there guess what you don't get paid.You could go after the seller for th ecommission after the fact but they have no money.

There really wasn't much benefit to the seller anyways to do the short if the second still wants to pursue them.Often times it's better not to do a short sale as with the financials you send in it gives them ammo to come after the sellers assetts if they turn the short sale down and pursue them.On this listing did you have the sellers order a payoff through a certian date???This will list principal,interest,penalties,backpayments,and any per diem fees,bpo,appraisals,foreclosing attorneys fees,etc. added onto the loan.

In short sales they are often way upside down so the best way is to list low below market and attract a bunch of offers and try to get one accepted.If you list a short sale high at or above market you simply won't get action on it.

I have done many,many short sales.They have a very low conversion rate to closing.

The reason I asked the question was that if I knew what the obligation was to the 1st, I could figure out what minimal offer I could make that would make the 2nd agree. In an 80/20 (or maybe any short sale); the object is to make the 2nd happy enough to forego the DEFICIENCY JUDGEMENT. I guess you are not concerned with that; but my feeling is that would make the seller happy enough to co-operate with me and not give me a bad property. Do you primarily list or buy?
Back to my question.. Is there anything that would preclude a listing agent from stating the existing loans (most likely the 1st) in the MLS listing??
If I knew that; I could calculate a reasonable, acceptable offer that would make everyone happy or go to another property. I think you are an investor; most of my clients are end users and want a deal, but are not smart enough to want a steal; at least they know their agent is not that smart either.

Yes the goal is too only accept the short sale if the second agrees to not pursue defeciency but they rarely agree to that.Most of the time the second will sell off to an assett recovery company for 50 cents on the dollar and take the rest as a tax writeoff.Remeber they are not in the collection business they are inthe loan business and interest making.

So are you listing these properties or buying them??????It sounds like in your posts you are askign a buying question.Why wouldn't you click on the tax record in the mls to get an idea if there is a second or not.Before going throuhg too much research on the buying end the first step is to see if the seller is even open to doing a short sale.Then go into the research yo umight have defeciencies,judgements,tax liens already attatched to title and those would have to be negotiated as well.I find those to want to negotiate more once they figure out they will be wiped out at foreclosure anyways.

The big mistake sellers make is they don't understand that these encumbrances on title will not go away when it forecloses they will still come after the seller.They are just agreeing to release the lien for a specific amount.If they agree to settlein full will depend on if the debt is in the hands of the original amount or if there interest in the lien has been sold off for a fee.

The offer to calculate has to do with the loan(loans) involved and the type of loan fha,va,conventional insured,conventional uninsured.Then it comes down to if it's an fha,or va loan it will be a full interior appraisal and they will take a certain net percentage of that value or they will foreclose.If it's a conventional loan an interior bpo will be performed and what value that comes in at will determine if your offe ris accepted,rejected,or countered.

Sometimes even if your offer is justified they will shoot it down.I have had some listed short sale that went to foreclosure and sold 4 months later reo for 20k less than my highest short sale offer.

I am going to chime in on this one. I think both of you guys are making some sort of sense, but maybe not understanding each other fully.

I can understand why one of you is asking about adding the payoff amount in the remarks. It may create a more serious interest from buyers' agents if they know what the 1st lien payoff might be. I don't know why that would be illegal to do so, as long as your seller is ok with it. Your seller still owns the property and it is their listing, not the bank's. If the seller is ok with you disclosing the payoff amount, you shouldn't have a problem with doing so.

I can also understand where one of you is saying that the 2nd lien gets paid hardly anything many times. I believe one of you mentioned that the 1st lien will only pay the 2nd lien around $1k - $2k in order to satisfy the sale. I agree with this, and it doesn't mean this happens only on low-end properties. I know that many times the 1st liens will ONLY pay around $2k to the 2nd lien. This is why many times the 2nd lien will not agree to it.

So some of the items that you guys are fighting each other on are both true.

Thanks Len;
The disclosure of the 1st payoff amt. was very helpful; if anyone knows why I should not; please let me know.
I was surprised that Super Realtor thought the tax records would give me the 1st payoff amt. It does not include taxes in arrears, selling agents commission, my commission, HOA fees in arrears; junk fees etc. I have negotiated a few using closing attorneys to deal with the 2nd, but thought I failed my client as I could not get enough of an offer to negotiate a decent deal for the 2nd and was looking to improve my way of doing business to better serve those who pay me.
I kinda figure that is the job.

I didn't say it would give you the first payoff amount.It's a gauge you can look at to see what they owe on the property.If the record shows from three years ago that the seller got a loan for 575k and then 175k most likely they got an 80/20 loan and most likley hardly any principal has been paid down.In fact being late with payments there is probabaly more owing on the loans then when they first bought.You can also usually see if they paid anything down.

What I find when I lsted a bunch of short sales is most buyers agents hadn't heard of them,have heard of them,or had a million questions on how to proceed.Only about 1 in 10 agents were well versed in them.People are going to offer what they want to offer not what the payoff amount is.Usually the payoff amount from the servicer is good for 30 days after that you hav eto get a new payoff amount again.

70 to 80 off an 800k house isn't that great in this market.I am seeing houses that owe 500k bought in 2005 get foreclose don which wipes out the second then the firs tlists reo to sell fast because there reo department is getting hammered with listings.The banks have to pric elower to sell because they are competing with builders dumping inventory to stave off foreclosure themselves and people relocating,divorce,job loss,pre-foreclosure etc.

So I am seeing these 500k houses go for 350k!Bigger homes I am seeing go for 300k off.So if I am a buyer why do I want to mess with your short sale when I can buy reo in the area and get a bigger discount??It doesn't suprise me that you didn't get a bunch of offers on it.

good luck

have your 2 homes priced at 800k sold yet?

Another option you could do while listing the Short Sale is to have your nearest title company pull the Preliminary Title Report on the property. This will show what liens they have on the property, although it may not be exactly up to date. You would see any HOA liens, trash liens, mortgage liens, etc.

I hope this helps...

No; my other 2 listings are occupied and do not have the same pressure.
Thanks Len; actually my closing attorney will pull a full title for me which I do on a "short Sale" listing(I am a good customer) But when I am "just curious" as to what it would take to buy a property, I really would not ask him to. The tax records give me enough to estimate a minimal offer (on any property) but I am trying to make a decent offer that will close with everyone happy.
I could not list at that price as I do not know for sure that the debtors will accept what I think is a decent offer. I felt that the answer was to post the amount under "private remarks" hoping to get a buyer. The actual numbers on this property were:
1/10/2008 appraised value - $798,000
9/30/2007 listed at - $700,000
Estimated needed to satisfy - $600,000
I felt someone at the $600,000 range would really be getting a good deal, not a steal; but a pretty good deal.
My short sale you would want to deal with because it is a clean, well refurbished home that you can inspect and if you find defects, walk. There are many of reasons to buy a short sale rather than visit the steps. I know you may save a few $ on the steps; but have you every made an appointment to preview one????
I am a realtor; not a buzzard. I think this business is about quality not necessarily lowest price; and I think you will find the client will be more likely to respect a good deal vs a steal. Many of these REO properties are trash that have defects that really do not make them the steal you may think they are.

Smiling Jack.
When listing a short/foreclosure make sure you have permission in writing from your seller for any unconventional information you might put on a listing. For example a 1st or 2nd mortgage amount. Mortgages are recorded in public records, but cover your behind. (no legal advice)

From a transaction perspective, the buyer doesn't care what the seller owes, only what he wants to pay for the house. Hence the short sale.

Listing price, appraised value, mortgage amount... none of that matters if you cant get an offer, negotiate the short, and close the deal before the bank forecloses. List the house at the highest price that will get you a contract you can negotiate and close before the auction date. In Tennessee, the seller has 21 days from the time the foreclosure is filed to auction date. Florida i believe is 180 days so you can have a higher listing price.

You gotta forget about retail when working short sales unless your market is hot.

Hope this helps.

i think banks now are looking at the fair market value vs any 80% rule. if they run their comps and they net more from the short sale, i think they are taking the offers. Thus, it really wouldnt matter what the first is.