Here is some information I have about this house. Now this is just an example situation, I am not really looking at this house in particular, I just want to understand the numbers.
Here is what I got off of zillow:
No other sale data is available
2006 Property Tax $967
Total assessed value: = $10,209
Market assessed value: = $131,307
Assessed value bldgs: $9,509
Assessed value land: + $700
It's a 4 bed, 3 bath built in 1970 house in Oklahoma City.
$126,000 - $145,000
Then it says "Trans Value $64,000 "
Now this house was found under a Preforclosure list.
Typically, what would you do to research this to even know if it is a possible deal?
What makes someone go into forclosure when they must only owe so little on the house?
I just wanted real word thoughts on some real world data that I have collected about this house?
What kind of offer's would be suitable for this? I read that on a preforclosure that people might just be happy with getting out of the house debt free and without hurting their credit? Could you approach soemthing like this with offering to pay remaining balance on loan and maybe throw in a few thousand extra?
First of all, information from Zillow can be used as an indicator only. To determine true market value you need to research recent comparable sales. Next you need to research title. What liens are outstanding against the property? What position is the mortgage in that is foreclosing? Are their back taxes owing? Judgments? Mechanics liens? Federal tax liens?
The process above is what you need to do before buying something at foreclosure sale and I'd recommend the same before approaching someone in foreclosure so you don't waste your time - and theirs.
For argument's sake assume you've found that there is only one mortgage, no other liens and the foreclosing mortgage has a payoff of 75,000 and the property is worth 130,000. In California there are strict laws regulating equity purchases so I would project the potential profit of a flip and split the profit with the homeowner. You need to know if there are any similar laws in Oklahoma.
If not, then everything is negotiable. They might simply want to escape and save their credit. Or they might be unrealistic about the property value, or unwilling to face their situation (likely) and waiting for that lotto ticket to come in.
Let your conscience be your guide.