If a house is foreclosure and owner is upside down can I offer a short sale to bank?
House is worth around 260k to 280k fixed up. It is in need of repair 15 to 20k. What would be a reasonable offer? I would like to wholesale it as first option. Thanks.
when you say a house "is" a foreclosure, it might mean a couple things:
- the bank has filed the foreclosure but it has not been done yet. This is also known as a pre-foreclosure.
- the bank has filled AND the property has been foreclosed. That means the property was sold in an auction, and either another buyer bought it or the bank got it back. When the bank gets it back, it now becomes a "REO", or Real estate Owned, which means it is a bank owned property now.
In your case, you said the owner is underwater, so I am assuming you mean he is in pre-foreclosure, since the owner is still in the picture.
Your options are, try to do a short sale or buy it at the foreclosure auction.
A short sale might be hard to do if the foreclosure sale is in less than 3-6 months. Short sales sometimes take a long time.
Buying at the auction is very dangerous if you don't know what you are doing. You should go partner up with someone that does that. If you are remotely interested in that, just buy going to the auctions, you will learn a lot.
Back of the napkin calculation:
ARV = 260k.
Profit = 5k
Repairs = 25k. (better be safe than sorry)
Purchase price: (70% ARV - Repairs - Profit) 152k
You are saying you want to wholesale the property once you have it in contract. Banks usually ask for proof of funds (for a cash or financed offer) when buying a short sale.
Thanks Rafael. According to RealtyTrac it is a preforeclosure for 400 days.
I see you are in New Jersey what county I'm not familiar with your town. I am on the boarder of Bergen County.
I'm by Philly. It is not unheard of 400 days on pre foreclosure.
Call the sheriff office and inquire the status of the property. The phone number for your county is (201) 336 3500. You can just ask if that specific foreclosure sale has already happened, and if so, what was the outcome. If not, ask the date, and if they have an estimate of the owned amount. Sometimes they do, sometimes they dont.
Post an update after you do so, I'd like to know.
My local county has a great website to get the foreclosure info, but I don't think Bergen County has one.
I still recommend you going to an auction to see how things works. I went a couple times, and talked to the winning bidders. They are weirded out at first by random people approaching them, but once they see me every week, they open up a bit.
Bergen County has the sheriff's web site where you can search for foreclosures:
@Kevin Hill , can you help me find where to search? I am missing something.
I used this site before:
but I wasnt sure if the information was up to date.
Thanks for the advise guys.
That's what it ends up linking to when you click on 'Civil Process' then 'Search Foreclosures'
There is a home just down the street from me, it's extremely abandoned. I checked it out on-line ;
1475 days online.
It's foreclosed, and according to county appraisers belongs to Chase.
How can a property sit vacant so long? Why wouldn't a bank budge?
Very good read on the subject:
Thanks for the links. Id absolutely buy it if the numbers worked and I wasnt in the learning/nervous/scared/analysis paralysis stage.
patrick I know how you feel. I was there for about 1 year before I started getting things moving.
From reading the other threads it seems the bank would never talk to you about a single deal. But i , being as stubborn as I am, would still try.
Spoke to the owner he tells me he has been going through the process for 4 years.The case went to New York Supreme court and he was discharged from the mtge but he is still on the title. He said he can not get involved with the property anymore or the bank can come after him. I asked for his permission o talk to the bank. He would not give me his lawyers name. The PMI is paying the taxes and insurance. He feels thats why the bank was not so anxious to move the property.Plus its a good neighborhood.
Do I have any other options?
We have no idea what the situation is, from what you said the owner told you. There is more to the story, and until you find that out, no direction to go will be apparent.
I'm sorry it is prefoclosure in NY I would like to do a short sale
Please report back if you can find a way to get this deal going. At this point I would move on. I think the bank is going for appreciation like many investors or there.
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