Short Sale & Bank Owned Case Studies
Here are the 2 case studies.
---Short Sale & Bank Owned Case Studies---
Case Study 1
Bank Owned Listing Transaction – Listed / SOLD
When assigned, the subject property was about 30 days post Sheriff
Sale. Redemption expired on apx. November 10, 2006. Between the days
the property was assigned and the day it was listed my REO team performed the following duties:
1) Occupancy Status/Check
2) Lock Change / lock box installed
3) Trash Out
4) Broker Price Opinions (x 3)
5) List property
Although our BPO value came in at $145,000 the bank chose to list it
for $175k, I believe an amount they received from an independent
appraisal. The "upside" or "repaired" value of this property was apx.
$195k. It required about $20k in repairs to bring up to retail
standards. The vast majority of the target market for a property in
this condition are investors. Investors that are working the "buy/flip
model" need a minimum of 15% profit margin. Hence our price of $145k.
We had an investor procured from our web site
www.preforeclosureusa.com/foreclosureteam
that made an offer immediately of $155,000. That offer was rejected.
Soon thereafter a higher offer came in from another agent. After some
back and fourth, an agreement was reached.
The property closed on December 28, 2006. This particular bank (our client) paid out 6%. 3% to each side.
The reason we got this business (and client) was because we make every
effort to register with REO organizations. Banks are constantly looking
for new agents for two basic reasons:
(1) Because they are not satisfied with their existing REO agents and
(2) Because their existing agents are over loaded with too much inventory.
Since receiving our 1st property from this bank, they have assigned 7 other properties to us...due to be put on the market in April and May of 2007.
Case Study 2
Short Sale Transaction Listed / SOLD
Our client (the seller) purchased this property in May of 2005 for
$260,000. It was purchased using a 100% LTV product. Her mortgage
balance was apx $265,000 (they rolled closing costs into the sale
amount).
By July of 2006 the seller had fallen behind on payments and could no
longer afford the home. Seller contacted us in June, responding to an
advertisement placed in a local newspaper (please see our e-book on
short sales to look at the specific ad we used).
Like many markets throughout the country, depreciation in sued and by
July of 2006, the property had depreciated 10% - 20%. Obviously
requiring a short sale.
We listed the property for $230,000. Communicated to the bank that we
were pursuing a short sale. Followed the steps, one by one listed in
our e-book on short sales. After being on the market for 30 days we
received multiple offers. The highest of which was $215,000.
The loss mitigator was "shocked" when we told her what the offer price
was. She claimed that there was no way that it was going to be
approved and proceeded to chuckle.
However, we forged ahead and submitted the offers to the
bank with the COMPLETE short sale package, including a HUD-1. The
bank then ordered the Brokers Price Opinion.
10 Days later we received an approval and a "lien release" for the
$215,000 minus real estate commission, our office "admin fee", along
with the other liens against the property. The banks final "NET" was
$192,400. A loss of $72,400.
The property closed on 12/11/06.
The origin of this sale was from a small ad, in a local paper. The
techniques used to execute a successful transaction are detailed in
our "Short Sales and Pre-Foreclosures Seminars".
