Posted by Earlene-P’colaFL on December 30, 2000 at 23:00:20:
Thanks dewco;good answer.I just grew one wing I’m on my way!!!THANKS.
ADVICE NEEDED!!! - Posted by Earlene
Posted by Earlene on December 30, 2000 at 22:02:22:
Hi Ladies-Gentemen,
I’ve decided to join in on the fun.I put my first offer in on a property.It has 3bedrooms,1bath a gas stove,and had recently been converted over to central heat and air.The owner is asking 52,900 and will carry 100% financing.I call the county court house recorder’s office and found out that the owner’s original mortgage was for 28,000 back in 1992.There are no liens on the property and the owner still has a mortgage, but he will not reveal his equity.He said I would have to consult his agent, but the agent says they don’t tell him those things;Is he telling the truth.I put an offer on the house for 42,900.The owner agent saids I would have to put up 255.00 for the appraisel, but says I would get it back at closing.I ask him how did he arrive at his price and he said a market analysis was done; what is the difference between a market analysis and appraisel.He also said the up front money would secure the property and shows my seriousness.ADVICE NEEDED;What would you do with this situation.What is my next move.Thanks for anything.
Re: ADVICE NEEDED!!! - Posted by dewCO
Posted by dewCO on December 30, 2000 at 22:16:57:
It doesn’t matter what the seller’s equity is, but it’s going to be somewhat less than the original $28,000 most likely (assuming no other loans).
How are you going to buy this. Usually getting an appraisal is what a lender requires before making a new loan on the property. A market analysis is what a real estate agent does when they pull up RECENT and SIMILAR sold comparables. Really is should amount to the same thing, only the real esate agent can wing it, with no rules, and appraiser has certain guidelines and limiations that they have to meet in order to establish a value for a property. Theoretically they are looking at the same data, and if interpreted the same or similarly they should both come up with the same market value for the property.
However, many times when listed a property will be listed high, especially in a really hot market. So list price doesn’t equate to market value. Here in creative RE, or any investment RE you should be able to check for yourself as to what the market value is, so you have a really good idea of what it’s worth.
You make you offer based on what it’s worth and what you need to get it for in order to make your deal work. Generally here in creative RE buyers are looking for MOTIVATED sellers (not property for sale) so that they can buy at 75% or less of market value. In the vast majority of cases property listed with agents will not be the bargains creative RE types are looking for (there are instances where this isn’t true, and depending on your market it could be more or less true), but that is a general rule. And yes, usually when dealing with real estate agents they want earnest money.