how do I help this seller?

11 Replies

Saturday I received a call from a man on behalf of a family member who wants to sell. He said that the asking price is 46k and that she would be done of the house either way, whether thru bankruptcy for foreclosure. The 46k is about what she owes on her mortgage. She could no longer afford the payments so she stopped paying and has moved out of the house already. The assessed value is about 47k. Zestimate is $58,881

My question is how can I help this seller out of this situation? 

A goal for my business is to help people before they go into foreclosure so I guess this would be one to learn with.

Don't count the zestimate, please. Its not a good source to utilize. It sounds like they are in a short sale. You need to perform due diligence first and foremost. Go visit the property and take a contractor, get a verbal estimate of repairs, pull the comps to figure out the ARV to get the MOA(maximum offer allowed). Find out where on the foreclosure line is the property. Is auction in a few days or what? Usually if the owner is default on their mortgage they often have other encumbrances on the property as well. Meet with the owner and find out the lienholder(s). Get in touch with the bank's short sale r.e. agent(if you don't already have one of your own). From the figures you've supplied its not a flip, but it could be a buy and hold if the rent in the area is good enough to cover expenses and have some positive cashflow(which may be verrry little). Some offers even from motivated sellers aren't deals and you may just have to walk away. Find the true numbers, they will answer your question truthfully. You may be able to help the owner or you may not. My coin.

Kudos,

Mary

  

P.S. You might want to research the foreclosures laws of the county / state of the subject property also. Some frown on non-licensed investors getting involved in these situations and can make things real ugly for you real quick.

Kudos,

Mary

@Mary B.  thanks for that. I did figure that wholesaling/fliping was out of the picture because the house doesn't have any equity. I thought about getting hard money to buy myself to rent out. I didn't think about any other leins that could be on it thou. I still new so I hope this is now stupid question, but where do I get comps that are more spot on than zillow.

BTW my adwords campaign got me a lead in philadelphia. would you be interested in it?

Originally posted by @Chris Purvis:

@Mary B. thanks for that. I did figure that wholesaling/fliping was out of the picture because the house doesn't have any equity. I thought about getting hard money to buy myself to rent out. I didn't think about any other leins that could be on it thou. I still new so I hope this is now stupid question, but where do I get comps that are more spot on than zillow.

BTW my adwords campaign got me a lead in philadelphia. would you be interested in it?

You can use the sold properties that are within 1 mile radius of the subject property which zillow does offer a list of in most cases. Four of those that sold in the last 90 to 120 days should do. Just don't go by the ''zestimate''. That figure is misleading. Realtor.com is another website that offers viable comps. 

Feel free to pm me and I'll help where I can.

Kudos,

Mary

p.s. Don't forget to use BP's Deal Analysis to help you out too.

Kudos,

Mary

Hey Chris,

What type of condition is the house in?  Have you seen the inside?  How many bedrooms and bathrooms does it have and what is the square footage? 

There may be an answer to this and you can make money also........Roland

Thanks @Mary B.  and @Roland Paicely   I'll play around with the deal analyzer when I get a chance. Here's the info on the house.

Located in Wilson NC 3 beds, 1 bath, 1,064 sqft  year built 1952 on 0.18 acre lot. I haven't been inside. But I did go look at the outside. Looks like some type of wood frame house. 3 near by comps from zillow

  1. 1906 Downing St SW, Wilson, NC 27893

    Sold on 7/9/2014: $60,000

    • Beds: 3
    • Sqft: 1210
    • Baths: 1.0
    • Lot: 10,018
  2. 1100 Third St W, Wilson, NC 27893

    Sold on 9/27/2013: $65,000

    • Beds: 3
    • Sqft: 1356
    • Baths: 1.0
    • Lot: 0.27 ac
  3. 600 7 Hills Anx W, Wilson, NC 27893

    Sold on 10/18/2013: $58,000

    • Beds: 3
    • Sqft: 1566
    • Baths: 1.0
    • Lot: 0.35 ac

Thanks

The house sounds O.K.  Although the inside can be a factor.  Since the owner lived in it I'm going to assume that the inside is at least in 'fair' condition.  I'm thinking that this could work with a Lease Option.  Naturally, you would have to talk to the seller to find out how far behind in payments they are.  But it is still possible to make it work.

At this point I would suggest you talking to seller to find out:

(1) What sort of condition is the inside of the house

(2) How much do they owe in back payments

You can e-mail me if you want.       [email protected]

Roland Paicely-(Real Estate Roland) 

I agree, we do subject to deals here in NJ. Shame it is in NC.

Tell the Seller to contact a local Realtor who specializes in short sales.  If the Realtor cannot procure a short sale within a certain period of time, the bank will often consider a deed in lieu of foreclosure.  The bank prefers a short sale over a DIL, so they always make it a requirement that a Seller attempts a short sale through a Realtor. (For Sale By Owner is not considered sufficient in attempting to market a home).  

If it is owner occupied (tell her not to move), in government backed loans, the bank is often willing to offer a financial incentive to the Seller to cooperate with a short sale.  This sum can vary, I have gotten my Seller Clients from $3K-$40K to cooperate with a short sale.   I think the Government is currently offering $3K incentive, and up to $5K on junior liens (on government backed loans).  Certain lending institutions offer programs that can increase that incentive as well.  

If a short sale is unsuccessful, a DIL program can also offer financial incentives to a homeonwer for cooperation. 

For your 2nd question. A local Realtor is your best source of comps. The MLS is the most accurate source of home sales data, which is one of the memberships Realtors pay to have access to. The MLS data is also what appraisers use. Zillow is misleading because it can have 2nd mortgage foreclosures intermixed, which is misleading (in terms of value and sales history). The MLS also has photos to indicate value of the comps, and usually has further detail about what financing type it qualified for and if Seller Concessions were part of the total purchase price.

BTW, It is MY opinion (not a lawyer, not even close) that UNLESS they have additional debt, besides the home, bankruptcy is not an smart option (not by a long stretch).  Foreclosure is also not the best method of relief, but it at least makes more sense than a bankruptcy.  I think bankruptcy is often the best option for cases when their is significant personal debt.     

@Roland Paicely  I'll be getting back with the seller this weekend and I'll get as much info as I can. @Greg Wake  How does the subject to work, and would it be an option for this situation? @Kim Knox   thank you for all the info you provided. It's all valuable information that I can use to help other leads.

thank you all again

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