I've got one unit under my belt and am anxious to move to the next. I'm trying to understand opportunities with pre-foreclosure and how to go about taking the first steps with that. I have a target that is in pre-foreclosure, but don't know what my next steps should be. Guidance?
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Well, I'm trying to figure out next steps and understand how this works. A potential deal I'm exploring involves an out of state owner who appears to be underwater and hasn't paid HOA fees for about two years. If I put in a low ball offer, am I dead in the water since the bank won't allow the sale? Is this considered a short sale? I have no idea where to go to educate myself on this.
Yes, it's a short sale and perhaps not an attractive one. The HOA will have to be negotiated out, and the bank wants FMV for the unit. Depending on how the HOA fares after a bank foreclosure, they may be willing to negotiate. You'll need an experienced short sale real estate agent to handle it from the get go.
HOA have the legal ability to foreclose on a unit before the lender. Before going any further, you need to find out if there is any money in this deal. It will be unlikely that the HOA will take less than what is owed. That would be your first priority and consideration.
From there, you need to find out how much is owed on the mortgage. Putting in a low ball offer on an underwater mortgage sounds like a big headache and a waste of valuable time. Short sales average 4 - 6 months to close.
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