Acquisition Troubleshooting For Sale by Owner Properties

2 Replies

Hi BP Family, what happens to the amount a Seller owes on his mortgage?

a) Buyer must pay off the loan before acquiring the property? 

b) Bank allows Buyer to take over the mortgage?

For example:

After repairs Value = $150,000

Total Seller Mortgage Amount = $100,000

Seller Equity = $60,000

Amount Seller Owes the Bank = $40,000 <--- What happens to this amount?  

Wholesaler Purchase Price = $70,000

Rehabber Purchase Price = $80,000

Repairs Cost = $20,000

Thanks Steven for the fast reply.  How are these transactions  negotiated with sellers?

Do buyers always offer more than the mortgaged amount so sellers are able to leave with cash in their pocket? 

Is it ever possible to offer less than the mortgaged amount or a price that frees the seller but he leaves with no cash?