Posted by Stew(NE) on October 24, 2000 at 17:42:36:
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Putting a foreclosure deal together? Piper, Kaiser - Posted by Stew (NE)
Posted by Stew (NE) on October 24, 2000 at 09:45:45:
What should I charge for putting deal to purchase a foreclosure together.
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I am negotiating with the second to buy the second. The other party is putting up the money.
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I will the assign the second to the party so that they can go to the sale and bid on the house. (I will be there)
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I found the mortgage broker who found the bank to give him the a temp commercial loan for 120 days.
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I have done all the preliminary title search for him and preparing all the documents.
Is it customary to do a percentage or a flat fee. If so what would that be.
Numbers: 1st 83K, a second of 35K, FMV from comps of 125 to 140K. I am negotiating to get the second for under 7K.
This means if he won at the auction his cost would be 87K for at least a 125K house. He plans to live in it and fix it up.
Re: Putting a foreclosure deal together - Posted by JPiper
Posted by JPiper on October 24, 2000 at 17:25:00:
Stew:
The approach I would use is to back into the deal. However to do this would require an estimate of the cost of fix-up. And then it becomes a question of negotiation.
For example…let’s assume the fix-up is $10K…and that this buyer is comfortable being in the house for $110K…thus gaining equity of $15K+. This means your second might have value of $17K. In other words, you would sell this buyer the $35K second for $17K. If you do this by assignment your fee would be $13K. If you had already bought the note then you would resell for $17K.
On the other hand, if you’ve already given your buyer all the details of your deal, he may balk. Can’t help you there.
Bottomline is that you back into your deal putting the buyer in the house at a price that he is comfortable with. There is no customary percentage or fee. It’s all a matter of negotiation.
JPiper