Went and looked at a great house... total turd in a nice neighborhood... grandpa lived there.. still stuff and vehicles on property... needs work, but its a BIG house, with a granny flat added on upstairs... They want $375k, which is laughable, as a recent comp with the sq. footage fixed up and with a pool is like 425k..
I offered $200k, quick close as is, but with inspection contingency... agent responds that they owe more than that, no point in countering. my agent asked what their balance was... $300K... so only like $330k will pay commissions and costs and pay off the bank...
Short of watching for it to go into foreclosure in a year... Is there anything I can do to get this house...? Will banks look at an offer to close out a mortgage below its balance... any other sneaky ways to go...? Love to hear some ideas...
You need to do a short sale. Still hurts the seller's credit, but less than a foreclosure.
Or, the seller needs to bring cash to the table to cover the shortage.
Or, wait for a buyer who will pay enough to cover the mortgage payoff.
Walk away. The bank will not take less than the mortgage balance. The only exception is a short sale, but the seller and their agent will have to apply for a short sale, which is a lot of work for the agent and no guarantee. The seller will have a short sale on their record which is negative to their credit. If the seller has any indication that they can get enough to cover the mortgage balance and commission, they will not short sell. That is what their agent will/should advise them.
Is there a creative way to do this otherwise? Sure, ask the seller to come out of pocket for the $130k difference so that the rest of the mortgage balance and agent commission is paid. Does that sound like something that they will do? My guess is no. Just walk away.
If a FMV offer NET's the servicer less than the total amount owed then this may be a candidate for a short sale. If borrower is current a short sale may or may not be an option depending on investor guidelines and if borrower is facing imminent default on the mortgage.
Its a probate sale... so I 1000% doubt there is $100k plus laying around... I was just curious if there was some vehicle that banks use to short circuit what I am sure will be a LONG foreclosure and a huge haircut if they can get something NOW...
Yes.....that vehicle is called a short sale. Heirs have very motivation to do one, it’s not Their personal debt. But, it wouldn’t be close to $200k.
@Wayne Brooks Yup..... I would just love to have been in that meeting when they got the selling agent signed up and he found this out.... he must have laughed then cried.
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