Are Listing Agreements Always Required?

I'm having problems understanding why a listing agreement is so imperative when working a short sale. I mean, the whole point is to get a purchase offer and that is exactly what I'd be giving, correct?

If a property is upside down(which most are) what exactly are they expecting to gain from this? It's not like that will change the value of the property nor will it my offer.

So, is this listing agreement just a technicality that can be and is usually waived after further negotiations or are they really that excited and demanding about losing another six percent?

Thanks

The formal listing requirement has been and can be waived on a case by case basis. I've found it is easier to give the lender what it wants and instead, concentrate on influencing lenders' perception of value.

It is the only way the broker gets paid.

If you search county record and find a candidate for a short sale, go for it direct.

SSPRO,
Under what conditions do you find that they are willing to waive it?

CJ,
I'm not sure I understand. I do "go for them direct". Still, the listing agreement is a requirement from most lenders in order to entertain the SS. Has this been your experience too, or are ya holdin' out on me <IMG SRC="images/forum/smilies/icon_smile.gif">?

[ Edited by davidstyles on Date 04/25/2008 ]

David Styles, I've been contacted by an ID guy who has an interest in MH investing/Lonnie deals over there.

So If you'd email me with your email address I'd pass him on to you as it might be profitable for both of you.

John Merchant
**Please See My Profile**
Tacoma WA

John,

I couldnt find your email addy and I cannot view/send PMs as I'm not a "member".

I'd love to talk to that guy. You should have him email me

e123low at hotmail .com

Thanks

[ Edited by davidstyles on Date 04/27/2008 ]

[ Edited by davidstyles on Date 04/27/2008 ]

It's a simple request that allows the bank to believe that an honest attempt has been made to sell it on the market.

For this reason we've been promoting that investors find some progressive Realtors who are willing to learn about short sales and team up. Get a copy of the Realtors Renaissance, which is a step-by-step report on how to work with Realtors (approach, listing agreements, commission, etc).
[addsig]

So if the lender insists on a listing have the sellers list their home with your friendly realtor and submit a purchase contract with the short sale packet to the lender? Should you also add your option in this SS packet? Now that the home is listed with the seller how do you find a retail buyer?
Normally you would work on the SS and in the mean time list the property (as seller) with a POA or option to find a buyer. But now the property is already listed with home owner as seller. Do you ask the realtor to keep showing the property?

The answer can get lengthy . . . but I will keep it short.

Yes. Send in the short sale package with the option contract (this is the P&S agreement). File the Notice of Option. This gives you the right to list, market and sell the property. Put on the MLS after the BPO.

If the bank comes back with a discount that makes sense for your company, then buy the house. If the bank returns a number that is not favorable, then continue negotiations while the real estate agent looks for an end buyer.

Note: this method does not work with FHA lending for the end buyer. [addsig]

I noticed you mentioned putting it on the MLS after the BPO is done, could you explain why to do this? Do you think the list price influences the BPO? I look forward to hearing your thoughts on this.

Yes, the list price most definetly influences the BPO/appraisal. A generally successful approach is to explain what your offer is and what the banks formula for exceptance is. Most appraisers if they like you will want to help you as best they can, long as your not asking for the ridiculous. For example.. " The offer is 500k on this. This bank will generally except 85% of the BPO. Would be amazing if it were to be within their guidlines.. (wink wink, smile)"

Where can one find the Realtors Renaissance report?

I found 2 short sale candidates (apartments) in LA.

The bank is a client of my attorneys firm. The got a conflict waiver and was put directly in touch w/ the general counsel.

I am now working "directly" with the bank to buy a note that has a non-curable default (the bank triggered an acceleration clause).

My plan is to do a deed in lieu with the owner and end up owning the property.

I will admit that this may be a more difficult path than working w/ the listing agent, but if you can build these relationships, it's great.

The listing agreement also provides some legal protection.