Newbie Here W/ ?'s Re: Financing A SS
Hi, all,
I'm just starting to research REI and have been reading these boards for only a short time.
From what I've seen on here and reading in my research, am I correct in understanding that you cannot obtain a traditional bank loan to do a SS? If this is correct, could you please explain why?
A little background as to why I'm asking ....I am not looking to start doing REI as such, but I have found a home I am interested in purchasing for my personal residence in which the owner is currently involved in filing a Ch 13 (and intends to surrender this home to the lender--if his repayment plan is confirmed; he seems to be having difficulty establishing a plan that is acceptable to the judge).
The owner owes $144K on the 1st mtg, then has 2nd for $16K & 3rd mtg (home equity) for $54K. Prior to his filing for BK, he had it listed for over a year (asking $250K), but would not negotiate on his asking price. It does need some repair and is in a somewhat remote location. From what I know so far, there isn't even anything to comp it against, due to its location and that it is the largest home among the few (< 10) that are in that area. Thus, I'm hopeful that a short sale would be a viable option.
I'm sure I've left out vital information but included extraneous info--please forgive my ignorance and have a little patience w/ me!
"am I correct in understanding that you cannot obtain a traditional bank loan to do a SS?"
No, that's not correct. But, since the window of opportunity to close is usually 30 days following mortgagee's written, short sale approval... you should have your financing pre-approved... subject only to an appraisal to confirm LTV.
The 'vital' info omitted from your post is the as-is, fair market value upon which every short sale is predicated.
So, answer the following questions: What's it worth? What's owed against it? What's it worth to you? Why would any of the the mortgagees agree to consider less than they are due? And which mortgagee(s) would be more inclined to agree to accept less?
I think that I said, or meant to say that you should get yourself prequalified for a loan from a conventional mortgage broker. Then, when you find the property, they can evaluate that particular property for the loan, and expedite the approval/commitment... having already addressed the personal financial stuff...
I am surprised they even called you back, that offer was so low they probably would have taken offense to it. Honestly you arent going to get that type of discount unless they place is going to need 40k or something in repairs. You could contest the BPO with some comps you have, but you wont have a chance unless your offere is a little more reasonable. They are not going to take 65k discount on a house with those numbers, I mean come on. This is just from my experience, others may have different experiences than me.
Eric5,
Thanks for the reply. It was actually a full appraisal done. I did show the appraiser how much work was www.needed.It needs about 20-25k work to the interior. How much do you suggest I resubmit my offer for?
Thanks,
mvm
If the as is appraisal is 130k your 20-25k in repairs doesnt mean anything. The property is worth that as is. Either the person who did the appraisal is wrong or you are wrong. What are the interior repairs needed that add up to those large amounts? I haven completely redid a house for that almost. Also if you put that much money into it you could only get 130k? With the as is appraisal of 130k, no one is going to take any lower than 106k, which is roughly 82% and I find that kind of discount hard to get usually.
did you meet the appraiser at the house to explain the hardship, and show the comps that you printed out, and the list of repairs? or was it just a drive-by. if so you can bring that up when you talk to loss mit again. say something like, " im shocked at that appraisal that came in, they couldnt have possibly gone inside". then they will send out another appraiser ( most likely).
meet that one at the property and start over