Short Sale Logic? - Posted by James

Real Estate Investing
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Posted by TheShortSalePro on March 06, 2002 at 14:11:22:

An “after repaired value” is predicated on an unknown. To effectuate repairs could require $100 or $10,000. Who knows? It only matters to the potential investor/speculator/purchaser.

With respect to a short sale, the only # that really matters to the mortgagee is the property’s confirmed as-is, fair market value.

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Short Sale Logic? - Posted by James

Posted by James on March 06, 2002 at 13:47:58:

Hi. I’m trying to pin down the motivations of the various parties involved in a short sale, but I’m finding that I have to understand more about foreclosures in general in order to do so.

I’ve got a question I would greatly appreciate a response to.

If a house’s ARV is 100k on the open market, what will that house typically go for at auction? A range would be greatly appreciated.

Thanks for any and all help!

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Re: Short Sale Logic? - Posted by James

Posted by James on March 06, 2002 at 22:34:57:

Doh! I should have been more specific!

The reason I want to know what a house worth 100k will typically go for at auction is because I want to understand the degree to which a 2nd mortgage holder would be willing to sell a discounted note.

Here is an example of what I am asking

Assumptions:

  1. All houses that go to auction sell for 80% of their ARV.

  2. House is worth 100k.

  3. 1st is 80k, 2nd is 18k.

Assuming the three things above (just as an example) then it becomes clear that the holder of the 2nd would be stupid to not sell his/her note if they got a reasonable offer. My question is…what are typical ranges for a house to sell at during an auction? Do houses typically for 95% of their ARV at an auction? Do they typically go for 65% of their ARV at auction?