Hi, I’m hoping the senior posters can give me some feedback here.
I want to make an offer of $428k on a house - not as an investment but as a home. The owner have two mortgages - originally 400 and 100. They haven’t paid for 2 yrs so I understand they owe about 460 and 120-130 now. I don’t know who the lenders are (have to go through the seller’s broker). I also don’t know what the likely market value would be, though a selection of low-end comps came in at an average of $464k. I am guessing that is really low for this house, if it were in move in condition ($500-$520?). I got an inspection and it identified needed repairs of about $45,000 (built 96 but badly maintained - although it’s a high estimate). Plus I would have to pay 2% to broker (may be able to get out of this) and $5k moving costs to owners.
1st question: do you think an offer of $428k stands any chance? It seems okay in relation to the original mortgage values, I think, but it’s far short of what they owe now.
2nd question: how much should I offer to Bank 1 and how much to Bank 2? You’d think the broker would advise me but he’s seriously apathetic.
I’m new to this, but why not talk to the broker to see if you could reach an agreement to pay him some small tribute (if the deal goes through) to allow you to deal driectly with the lenders (that he will work with you to get the seller to sign auth. to release info). I think this gives you a much better shot at being able to negotiate directly with the second lien holder, to get the second mortgage down quite a bit if the property is facing foreclosure…
Then just go ahead and see what kind of deal you can work out with the lender in first position.
Like I said, I’m new here…but I would love to hear what others have to say. Either weay, best of luck to you!
goldmine, an auction was announced but then it turned out the bank had messed up the procedures and had to start again. Apparently this gives us “another month or two” according to the agent. The owners received another letter telling them to pay up by Sept 13th but nothing seems to have happened since then.
Bedley, thanks for the suggestions. Unfortunately, for some reason the seller (and agent?) seem completely opposed to anyone else dealing with the banks. I hope it’s just mistrust (in this case unwarranted) and not sleaze…
The agent’s job is to look out for the seller’s best interest. Letting you talk to the bank to get a lower payoff on a short-sale does not really qualify unless the agent is not getting any showings or any interest in the property at the current price.
You could try to reason with the seller saying, you are just doing leg-work for them that the agent doesn’t have time for, and remind them they will lose the house if the agent doesn’t sell it in time. Let them know you are just looking for a win-win situation.
You could also try to reason with the agent to let them know the same thing, that you would be doing the tough leg-work and that if a SS is approved, they still get paid their commission.
If a few more attempts to reason with them don’t work, I’d walk. It is their loss, literally.
By the way, based on a quick assessment of your numbers, it doesn’t look like a good deal to me. Even if it is for your primary residence, there are a lot of variables in a home that needs $45k worth of work. My offer would be no where near $428k.
Settle with the 2nd lien first. If the agree, pay the out of the 1st liens total net price. That’s normally the only way a 1st will even short. Unless you wait until the title comes in, the don’t expect much discount after you have pissed them off. Otherwise, offer them this. Tell them everything. Put everything in you Hud 1 statement. See what they say up front first before you waste any more time
Dri, I must go along w/ turbo , this is not a great deal, We are in a buyers market, you are trying to make this deal works, bad sign. to many easy deals out here, I just purchase a deal, house valued 385,000. neg. short sale for 185,000, no work needed. Make you life easy find good deals. see ya, goldmine
Gentlemen, thanks for your advice. You are too right that we shouldn’t have to work this one so hard - it’s just that this a house we like and we’re tired of looking elsewhere. Your comments have underlined to me that our offer is **** good, despite the agent’s negative comments. The property has been slated for aution now, and at this stage I’m not going to try and persuade anybody any more. As you say TBR, it’s their loss…