It’s almost comical if it was’nt so tragic. Not less than 2 years ago I was looking to buy preforeclosures, now I’m currently in preforeclosure. Like a lot of people I found myself without a job due to cutbacks, which could’nt have came at a worse time considering I had purchased land with the intent of new home development.
Can any investors offer some advice on people in my situation? I know with the real estate market currently existing at a low point that it presents challenges to selling property. The home I live in (south suburbs of Chicago) has a 1st and 2nd loan both of which are deliquent, I owe approximately 270k. But the houses in my area are now selling for the low to mid 100’s. The bank (the holder of the 1st loan) has agreed to allow me to shortsell the home, but I have’nt had much interest from potential buyers (the house has been listed for about 3 weeks). I’m thinking I need to lower the asking price from 170k to a bit less, maybe a little less than 160k. I could also probably generate more interest if I took more pictures of the property.
At any rate I would weclome any helpful comments or advice from any investors.
Is it possible to get someone to rent it or lease/purchase to cover your note?Maybe get enough down payment to catch your notes up.Hope this helps,I hate the situation this economy has us all in.Best wishes. :cool
I wish I would have thought of that a few months ago, but since I’m behind by almost 8 payments (more than half a year) I’m not sure if it would help.
Arkitech,
What you owe is irrelevant. The note is likely held by the secondary market investor (SMI), and the approach to analyzing the value of a short sale has changed from the old short sale vs. REO comparison analysis to the net to lender minimum threshold percentage of the fair market value. So, the only thing that matters is the fmv. That must be calculated carefully. We have a strategy that we recommend to the agents that work with us to set the list price at 95% fmv, and then reduce it weekly to generate interest and offers.
The price that will be approved by the SMI will be the net to lender minimum threshold. You likely won’t know that in advance, except that FHA is 88% if listed and the purchase contract is dated in the first 30 days, 86% if 60 days, and 84% after 60 days. If not FHA, then it is a guess depending upon the SMI and the specific loan product. It could be as high as 89% or into the low 90s, or down in the low 80s and even below.
Be careful. My experience has been that real estate agents often are only too willing to price it high, but that works against you and only serves to keep their sign in your yard so they can get more business off it to your detriment.
Ken Lawson JD