I know of someone who is going to be in foreclosure. He does not have any legal representation and does not

Asked by Angela Moore, Indiana Fri Dec 28, 2007

plan on getting any. I know his debt is more than the value of the home which is also the 2nd mortgage. Can a third party purchase the home (short sale) without hiring a Real Estate Agent? If so, what steps do I follow.

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Don Tepper, Agent, Burke, VA
Fri Dec 28, 2007
Let me go off in a different direction on this one. I'm not a lawyer or accountant, so I can't offer legal or financial advice. I'm not a psychologist, either, but I am going to give you some advice regarding motivation and behavior.

Many people facing foreclosure are in denial. They don't believe it'll actually happen. They're convinced their uncle, or cousin, or brother will lend them the money. Or they think the Bush Administration's new initiative will save them. Or that they can raise the money somehow, from somewhere. And, frankly, people who made bad decisions that led to their financial problems have demonstrated that they make bad decisions and often have poor judgment. Now that they're facing foreclosure, why should they suddenly acquire good judgment and make only good decisions? They don't.

You say this person "does not have any legal representation and does not plan on getting any." Does that sound like good judgment to you? No, I didn't think so.

Now, you're to be commended for trying to help someone, and I hope you're able to. But recognize that this person has made, and is continuing to make, poor judgments. So, be very careful. Be prepared to be attacked when you're only trying to help. Be prepared to have your motives challenged. Be prepared for this person to not act in his/her own best interest.

As the other commentors say, sure, it's possible to purchase the home via a short sale without hiring a real estate agent. Though the basic requirements are the same for most lenders, many lenders have their own specific set of documents and requirements. Your first step would be to get the person's authorization to speak directly to the lender, and then to request the lender's short sale package.

But short sales are very tedious, time consuming, and complicated. And, as Christopher said, there's really no advantage in making the attempt without an agent. And you don't just want any agent...not even a good, experienced, knowledgeable agent. You want one who knows how to do short sales. And also--and I say this from personal experience--you need to be working with an owner who really, truly, is willing to do a short sale.

Hope that helps.
1 vote
Christopher…, Agent, Hemet, CA
Fri Dec 28, 2007
It certainly could be done but, since the lender will be the one paying the commission, using an EXPERIENCED agent to handle the transaction will save you much time and headache as the process can be very different from lender to lender. You wont be saving anything by not utilizing the services of an experienced agent and may actually save quite a bit when using an agent EXPERIENCED in short sales.
1 vote
Team Forss,…, Agent, Temecula, CA
Sun Dec 30, 2007
If the homeowner contacts their lender and says we want to try and sell their home but the market doesn't allow for him to pay off the full mortgage. What do I do? The first thing out of the phone bank mouth at the lenders loss mitigation office, is going to be: (it is a phone bank with scripts and all) is to contact a agent and get it listed on the market and then turn in the financial package. They pay those commission fees and know that it is likely that there will be less liablity for the bank if an agent handles the transaction.

Only an experience invester could swing a short sale buy without an agent and then the lender is going to give you a hard time.
The seller must give you written authorization to speak and act on his behalf before the bank will even speak with you.
Then the seller must provide a stack of documentation to the bank to back up their hardship. ( I truly mean stack, usually my submittals are anywhere from 40-70 pages long) . Getting this process alone acknowledged can take weeks because the phone bank must receive the stack and then upload the data to the computer, as well as answer 500 more phone calls that day about the same topic.
I know you think you are saving the lender or your friend money by not using a realtor, but I think a realtor will actually save you time and headache in the long run and won't cost you any more then doing it yourself.
0 votes
Becky Alexan…, Home Seller, Mount Horeb, WI
Fri Dec 28, 2007
Your friend can sell there home For Sale by Owner, but they need to talk to their lender about doing so. There is a timing issue and the bank may not be willing to allow the home to be sold for less than what is owed. I would suggest they first talk to the lender to find out the options.
0 votes
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