need suggestions on forclosure deal - Posted by Matt B

Posted by NJDAVE on April 23, 1999 at 18:56:10:

  1. Have you seen the ‘appraisal’ or has the owner simply said it has been appraised for $65,900? 95% of the homeowners think that the tax assesment is the appraised value which we, as ‘pros’ know is not the case. It may be, but more likely is not. A real estate agent’s ‘appraisal’ of market value may be inflated so that the listed asking price would cover liens and real estate commission, and would have no bearing on it’s true market value.

Suggestion: Decide what you are willing to pay for this house so that the ‘opportunity’ makes sense to you.

Then, with the Seller’s cooperation, proceed down the short sale route.

If you need help, contact me, or check website: (we do shortsale administration for those homeowners who face mortgage foreclosure, investors, speculators, Realtors, and others who want to pay less than what is owed on a property…)

need suggestions on forclosure deal - Posted by Matt B

Posted by Matt B on April 23, 1999 at 18:36:19:

I got a call on my ad this afternoon from a woman whose house is being forclosed on. She is willing to dump it for what is owed on it. I haven’t dealt with forclosures yet, so I need some help to see if I have a deal here, and what I should do with it.

Here are the numbers…
It has been appraised for $65,900. There is $58,000 owed on the property. The payments are $658, which does not include taxes and insurance. The occupant has just divorced her husband, who, she says, got the place 3 months behind before she had him removed from the house. She has not paid since July. She says that the bank told her to list the property through a realtor to try to sell it before they had to foreclose. (Sounds awfully flexible for a bank that has not been paid since July.) She says that a little over $5,000 is needed to bring the loan current.

What can I do with this place? It seems to be in a fairly marketable area. From the woman’s description, it is in good shape. It is a 3 bedroom, 1 bath home. I was thinking about taking it “subject to” that loan, and maybe working something out with the bank on those back payments. Or perhaps that wouldn’t be a good thing, negotiating the payments on “someone else’s” loan. Could be a problem with “subject to” aquisition.

I got the impression (but didn’t confirm, now that I think about it) that her husband has no further legal interest in the house. She referred to her lawyer “getting all they could” from him. Obviously, I left an area that I still need to investigate.

I would appreciate any input on this deal. Thanks, guys.

Re: need suggestions on forclosure deal - Posted by Irwin

Posted by Irwin on April 25, 1999 at 08:53:01:

The best thing to do with one of these is to let it go back to the lender and try to buy it in the 40s for cash.
If you try to do what you suggest with the owner, you will be upside down the minute the ink hits the paper.
Also, husband’s interest might still be a legal issue.

Re: need suggestions on forclosure deal - Posted by Rob FL

Posted by Rob FL on April 24, 1999 at 22:03:22:

From personal experience in foreclosures, if FMV=65,900 and the mortgage amount is 58,000, then you should pass on it. More than likely the interest and late fees have driven the amount owed up 3 or 4 thousand dollars. By the time you close on the property all you will have is a few thousand dollars equity in a partly run down house.

Re: need suggestions on forclosure deal - Posted by Tim Jensen

Posted by Tim Jensen on April 24, 1999 at 08:23:58:


If it was me I’d pass up the place not enough equity for my taste.

Good Luck,

Tim Jensen