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Randy & Kim-

Short answer is maybe. Here's what happens on a short sale. That bank/lienholder is owed more than the property is worth or will bring at sale. The Seller/owner of the property pre-negotiates with the lender to sell to property for less than the mortgage is being held for. Typically the bank makes sure the seller walks away with ZERO dollars, since the bank too is taking a hit. This will help the lender as they don't have to follow through with an expensive foreclosure suit. The theory is that they (the bank) would rather take a 30,000 to 60,000 loss than to sit on this property if is was foreclosed on, each month paying taxes, maintenance, etc.

Most sellers do not want to spend/invest any $$$$ since they are walking away with typically nothing. That being said, I have noticed more calls from shortsales & Realtors who specialize in short sale customers over the past couple of months. They realize the market is so competitive they have to do something to make their property stand out. Typically if the lender allows a short sale the owner is given a waiver that clears them of liability from the portion of the mortgage that is left over ( the house has a mortgage for $200,000, it sells for $150,000, so there is $50,000 left being owed to the original lender). In most short sales, the lender forgives this debt and all parties walk away, so the homeowner may have good financial motivation to spend a little $$$ on the house. The question is " do they have that money to spend?"

A foreclosure is the next step when the short sales doesn't work. That is the final adjudication by the courts that the property no longer belongs to the Borrower and is legally returned in title to the lender. The bank now OWNS that property. Also a foreclosure doesn't necessarily mean that the owners debt is forgiven on the house. In some states, (like florida) the lender can pursue the previous owner for a judgement for amounts due over and above the value of the house, ( if 200,000 was owed, the bank forecloses and sells for $150,000, so 50,000 is still "owed" to the bank). Some banks can/will pursue this as a deficiency judgement.

I would be very careful on doing any work such as this for a Realtor/bank/homeowner on credit however. It would be nearly impossible to ever get your money if they didn't voluntarily pay it. A foreclosure would wipe out any claim to a mechanics lien you would have. I do think we'll see a time in the near future when banks will start spending some money on REO ( real estate owned) properties to fix them up and make them look more attractive. They will need to do this to help sell the glut of houses on the market causes by the current foreclosure crisis.

Best think you can do is make friends with some agents who specialize in short sales and let them know your services an short marketing time, give an advantage over the competition, and help the roof pass an inspection.

-- Edited by swee****erfish on Monday 8th of November 2010 07:15:46 AM

Ray
Thank you so much for your very in depth reply. The many aspects of running a business includes info like this ie: "the mechanics lien on a foreclosed house as not collectible. "

Thanks again,
Randy & Kim

WDE wrote:

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Great advice Ray. I remember the good old days of free breakfast/lunch for the office from every mortgage agent in town.. LOL

Realtors are a great way to get referral business. It might be a little slower in today's market, but target top producers and change your discount/referral terms a little to adapt.

-- Edited by WDE on Saturday 6th of November 2010 07:43:30 PM

-- Edited by WDE on Saturday 6th of November 2010 07:44:22 PM

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Back in my establishing my business days, I bought lunch for entire real estate offices, and got up to give my little speech. Everyone has their own approach to public speaking. I try to be entertaining and funny, since people seem to remember that .
I still get roof cleaning business from several real estate offices I bought lunch for years ago. Sometimes, we used to split the lunch bill with other speakers. I nearly punched out a mortgage guy who took WAY more then his allowed time to speak.
I told him "You took 75 percent of the time, you pay 75 percent of the freaking lunch bill"

 

Roof Cleaning of Virginia Beach, VA 757-650-7456. wrote:

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Chris I haven't bought lunch but what I have done is talked with real estate agent's I do work for and when they are doing training at there main office. I have did a speech and even a power point presentation on roof cleaning, pressure washing and other items. I have a few that use me on a  regular basis but also the one's that do flip houses just depends on how many they are doing.

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Actually, I really enjoy getting up in front of a room full of people, especially Realtors!