Is this worth pursuing?
A potential seller is in foreclos. and delinq 8K and has put his house on the market. I called him to get more info. and he informed me that he will take 70K cash and walk away. This is a 3/2, 2000sqft and comps are bet 275K-350K. He owes 160K. My question is how can acquire this deal? If it is even a deal at all? So can someone help me out?
Thanks in advance.[ Edited by Hammond on Date 04/16/2003 ]
Hi Hammond,
This might be a good opportunity for a pre-foreclosure sale, but not likely for a short sale. Even though the owner has a fair amount of equity in the property, a homeowner in foreclosure isn't usually in a position to have a strong bargaining power.
There is a pretty big gap in the comps that you provided. If I were you, I would have a local realtor do a CMA and compare it to that property only. Tell the realtor that if you buy it, you will list the property with them. They will usually do a CMA just to keep their name out there.
Once you get a more firm ARV, then you should start negotiating with the owner.
You might tell him that you will give him the $70,000 cash that he is wanting, but minus the 8K in deliquent fees, and minus a realtor fee of about $20,000 which he would have to pay if he tried to unload it without you.
Double check any other liens on the property, but you may have a good one in the works!
Best of Success!
BAMZ
Sounds do-able, but you need much more info. For example, what exactly is the mortgage(s) payoff including all foreclosure related costs; are there any other (junior or senior) liens that would have to be satisfied from proceeds of sale; what is the approximate as-is, FMV of this property (comps are an indicator, but certainly not a substitute for an appraisal);; is there time to do the deal, and, perhaps most importantly, can you close the deal if the numbers are acceptable to your acquisition strategy?
Thanks for the info. I'll make some calls to get more details as you have mentioned. I appreciate your replies. Any further details I gather I'll post.
Here is what I have gathered since. The seller has a lis pendens for 27K and a utility lien. The realtor is trying to set up a meet with seller and myself to discuss terms of this deal. i propose that he take 30K cash which leaves 160K for the payoff and also the lis pendens and utility liens to satisfy. Seller insists on the realtor to be involved in deal and her com is 2.5% which i feel he should pay. so i would like to know if an offer of 240K is acceptable, which includes liens, payoff and cash. CMA on house is 290K. However, the house is not on MLS, so does this mean that the realtor is only allowing drive bys for potential buyers. Could you please assist me in presenting an offer? any addl info needed, just let me know and i'll reply back.
Thanks for any assistance.
Can the realtor show you a contract that the seller signed?
I haven't asked her that question. Are you saying that i should?
She did say that there was purchase agreement signed with another party who is looking to qualify from lender. however, she indicated to me that the seller is motivated enough to take a cash offer, whatever comes first!
[ Edited by Hammond on Date 04/25/2003 ]