Edinburg, TX · Member since 2015 · 4 posts · 0 votes
I am currently looking at purchasing a REO property. I was wondering if there was a way to find out what the bank paid for the property, so that I will have an additional reference to base my offer upon?
and its no bearing on how much they have in it... banks do drop bids all the time.. finding out if it was full credit.. can be pretty easy if you establish the original loan and it looks like all expenses and arrearages were added to the credit bid...
Thank you guys for your input. The original loan amount was, $210k. The bank bought the foreclosure for $170k. Can I be safe to assume that the bank will accept an offer somewhere in the middle?
First, the bank didn't "buy" the property, but I know what you mean.
$210K was probably 80% or less of the value of the property when the loan was paid, if it had PMI, more likely a holding company would be selling it.
The payoff at auction will include costs of sale, should include costs to provide good title as well.
The bank has holding costs, admin, insurance, weatherization, mowing and property management over the term from their taking possession, which could be before a sale if the property was abandoned as they have the right to protect the collateral.
If the bank has held the property for sale, it will begin an automatic write down on the books. At that point a bid of 80% of book may take it off their hands. Look to the marketing time while the property was in their possession. And you don't know if additional payments to principal were ever paid, not usually, but some people do, especially initially.
Trustees usually charge 10% of the price, you can ask about costs of court, notices can be expensive, not like advertising a car for sale in the paper, but those costs can be determined too. RE taxes accrued from the sale date will need to be paid as well. They already had title insurance but a search was done in the process.
All you are likely to get in Texas will be off the original deed of trust, note amount at a beginning interest rate, it may not say if it was a fixed rate or an ARM, notes are not always filed, but the security agreement is. So, you'd be guessing at any payoff balance.
But, the real question is what is it worth, as Wayne mentioned, their costs are irrelevant. If it is worth $250K the bank has an obligation to obtain the best price as amounts over the amount due them are due the past owner. The foreclosure and sale process is not a giveaway program. Your bid needs to be competitive in the market, what the bank has in it won't matter. Besides automatic write down requirements, a bank will drop a price when it is justified in that market to get it sold as Jay mentioned.
Bid what you can bite off for a good investment based on your use of the property, not what a seller has in it. Good luck :)
