Need Advice
I posted this question on the Foreclosure forum, however, after reading this forum this is where I should be asking my question.
I ran across a property which is for sale by owner. I learned from the neighbor that the owner is just about to be Foreclosed on. The house is vacant and the owner lives out of state. I called the owner to ask what he wants for the house and he told me $160,000. I told him I learned that it was ready to be foreclosed on and maybe we could work out a deal. He is 7 mo. behind on payments. He is the scoop:
He purchased 3 yrs ago $137,500
Refied 1 1/2 yrs appraised $151,000
(so he says)
Owes $135,000
unpaid principal $12,000
(I think he means interest)
Penalties $ 3,300
Total $150,300
The house need all new carpet, it has no appliances, no landscaping.
I think the house is worth around $150,000 -$165,000 when all fixed up. I need to have my realtor pull comps in the area, but I think I am pretty close. This home would be purchased by my parents to live in.
My question is, do we go in with a low ball offer to him, and how low do we go? Or do we wait until the bank starts the FC process? Andy insight would be appreciated on how you handle deals like this.
If we were to present an offer to the bank, what dollar amount should we start with? Should we go in at $130.000. Would they consider such a deal just to get this off of their books?
If the property is in good condition, and you can't claim that there is any fixup to be done, then I would find the lower comps and subtract about 20%. But keep in mind, you can't really do anything until the owner agrees to cooperate. Remember, if you negotiate with the bank, owner cannot receive any money.
Prior to making an offer... you should conduct a thorough inspection... and confirm the property's as-is, fair market value.... you'll have to defend it's value to the mortgagee... so do your homework.
[addsig]
Ok, I just received an authorizations letter from the owner of this property. He is willing to just walk away if he can. He sent me the payoff statement which was good until Sept. 22nd. Each day after an additional $34.16 of interest is added and a late charge of $67.08 is assessed.
Unpaid Principal $135,614.89
Interest 9.25% 12,184.79
Escrow/Impound Overdraft 3,303.75
Suspense Balance -419.66
Unpd late charges 737.88
Exp Pd By Ameriquest 13.90
FC Fees 210.00
Property Inspec. 20.00
Total Payoff as of 9/22/04 $151.665.55
I had a Realtor pull comps and the lowest sale in the subdivision was $183,000. The house needs new carpet, paint, landscape, appliances. The house is only three years old and has been vacant all summer. It was not vacant thru the winter.
Please advise as to how I should approach Ameriquest and what would be realistic in our expectations of obtaining this property.
Thank you in advance.[ Edited by shewey on Date 10/12/2004 ]