Negotiating Foreclosure Payoff

[Alex Lee]

Hi all!  I’ve got a duplex that we grew up in located in New York.  We lived in one unit and rented the other.  It was owned by my dad, but he passed away a few years ago, we rented the whole thing out.

We have since moved out of state and hired a property manager.  However, the property has been going down hill.  When the property did rent out, it was able to bring in $2300 (gross).  But over the last year, management has not been able to rent it out, and the condition is poor.  It’s sitting vacant and we’ve not been able to pay the taxes or mortgage.

We now owe $13k in taxes and there is $90k owed to the banks. 

My question: what options do we have at this point?  

We are leaning towards just letting it go in the tax sale.  We’ve talked to realtors who think it will sell for about $90k, so we’d still owe more than what it’s worth.  

Is there any possibility to negotiate the payoff with the bank?

Thanks in advance for suggestions!

[Jay Hinrichs]

Quote from @Alex Lee:

Sorry I probably didn’t explain it well.  The property is now in my dads estate.  If we sell it out of the estate, we bring in 90k.  90k has to go to the bank.  Then we owe an additional 13k in back taxes.  So does it make more sense for us to just let the house go, as in we make no payments to any party, and let it go in a tax sale?

Or is there an option where we can discuss a lower payoff amount with the bank?  Wouldn’t it be in the banks best interest to work work us before it gets to the point if a tax sale?

you certainly can attempt a short sale and most likely if you put some effort into it you will get one.  I did this for my step daughters when they inherited properties and such with more debt than the estate had.. in some cases i was able to settle for 10cents on the dollar and others pretty big discounts.. you need to have cash though..  or see if they will let you list and sell it . if they do that they will most likely want to make sure you dont profit.