Short Sale With Equity
Will banks allow a short sale when the owner has some or a good amount of equity? I am speaking with an owner who owes 202K to the bank, and the house is worth about 320K. Do you think the banks would take less than 202K in this situation? The owner wants quite a bit of money, so I NEED to get the 202K owed to the bank down (by the way, the bank auction is scheduled in about 2 weeks).
Well you don't have very much time to work with, 2 weeks will go by very fast if you are trying to negotiate. It will depend on the bank, but with two weeks to sale, the bank may feel that it would be worth it to just take it back because there is equity. Are there any repairs?
If the property has an as-is, fair market value of $100K more than the mortgage loan payoff, there is virtually zero chance that the mortgagee would consider accepting a penny less than they are due. What would be their motovation?
When trying to prequalify a short sale candidate, the primary question to ask is would accepting less be in their (mortgagee) best, financial interest.
Projecting into the future, will the mortgagee recover all that is due, plus their costs to recover?
Since there is a 100% certainty that the mortgagee would be made whole if they pursued foreclosure...there really isn't any motivation for them to accept less.
I've never heard of a bank accepting a short sale is when there is equity in the property. Maybe I don't hear alot of what goes on, but that's been my experience. As the previous post mentioned, there no real motivation for the bank to work with you, especially in that case. They don't want to work with us to begin with (most of the time).
Ryan J. Schnabel
stapler,
Glad to meet you.
Are you saying the owner would rather have the house go to auction than accept some type of offer on his equity?
Seem like there is plenty of $room$ for everyone in this situation, so what is the problem here, why even enteratain a short sale.
John $Cash$ Locke