House In Foreclosure...thinking Of Offering Shortsale...need Help!
I have a house that is in foreclosure. The balance is $168,700. The house comps at $225,000. The arrears I believe is about $50k. The house is in need of repairs...around $40-50K.
Homes in the area going for $400k plus.
I would like to offer bank a shortsale. Can someone help with the details? I do not know how much of a discount I should request without insulting the bank.
Is this a deal I should go after?
Your suggestions and advices are greatly appreciated!
What do you mean the house comps at 225k, and the homes in the area are selling for 400k? Is 400k the arv? Or are there other homes in the area that need 40k-50k in repairs that are selling for 225k? I'll read it again, but I'm confused. Z
i can say first, that i'll reply but i AM NOT an authority on the short sale process as i've only submitted 4 packages myself.
but the first thing you need to do is see if the seller is open to having you buy them out of foreclosure. if so, ask them to sign an agreement to authorize you to speak with the lender about thier loan. i actually get the seller on 3-way with the lender and vouch for me over the phone, then from there you're rolling without them.
then have the bank send you a short sale package. this will be sent immediately and it will be self explanatory - it will tell you exactly what you need to send them to have your offer considered. be prepared, there is some time involved in gathering all bits on info to send a complete offer back to them.
from what i've read, 70-82% of fmv is what they'd "consider". however, my offers rarely have anything to do with figures like this. i find it more justifiable to start with the comps and mortgage balance including arrears, (whichever is the lower number) and use that number to start deducting for my profit, repairs needed, holding time to re-sell and back taxes (if any), then come to a price as my max offer. hopefully it still falls within thier acceptable range, but if not, i couldn't work it anyway. i still submit, even if it turns out to be a laffer. the worse they can do is say 'no'.
i hope this helps.