I just sent out some letters to pre-foreclosures and I have a feeling I will be dealing with a lot of these sellers.
Seller calls, wants to sell his house before its foreclosed on. Wants to save his credit. House is vacant. Bought it for 65k. Hasn't paid the mortgage in 6.5 years!!!! Owes the bank 172k. Wants to do a short sale but I have no idea how to, nor do I want to being new to investing. Can someone give me some guidance in this field?
Short sales can be tricky - for your first one, I wouldn't try to do it on your own, but instead find an experienced Real Estate Agent in your area who can help. As a buyer, you won't have to pay any fees, and you can learn a lot through the process by watching someone who has done this before and asking them a bunch of questions that are specific to your situation and area.
@Shawn Connors , but what is it worth?
Regardless of what the Seller agrees to, you do know that the bank has the right to not let go of the Title until they are paid in full, right? [Not legal advice]. All the best...
Hasn't paid in 6.5 years? How in Sam Hill does anyone get to freeload and squat that long without legal intervention? Is the bank still in business?
If it has been dragging on this long, I'd bet there's little to be gained by chasing this one.
Negotiating the balance will be one thing, I'd be more concerned with all the liens that come flying out of the air once the notice of a sale gets posted.
I'd find another short-sale to pursue.
Best of luck.
@Brent Coombs it's worth about 135k. No I didn't know that. I have 0 experience in this. I would just like to pass it on to a short sale expert
Most banks, as a condition of the short sale, will require it to be listed. This means that you need to find an investor friendly agent with short sale experience. (You should have this as part of your team regardless.)
You need to have more information on the loan (and maybe you do) to see if this is worth pursuing. Reinstatement fees are not the same as payoffs. If you got to $172 by looking at a statement that had $65K principal balance and $107K "now due" this is not the number you will be negotiating.
Many banks will look at fair market value less a discount for condition and compare that to their internal needs.
Has a sale date been posted?
Remember, you have three opportunities to purchase this property: pre-foreclosure through a short sale (now), at the courthouse steps, and after the bank lists it as a REO if no one purchases it at the sale. Even if you can't get any traction on a short sale at this stage, if you are talking to the borrower, you have a tremendous advantage by being able to get inside and inspect the property. This gives you a much better idea than your competition, who will be buying blind, if it goes to sale.
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