Hi All,
I am attempting my first short sale deal here. The current owner owes 17k in back payments. The mortgage balance is 89k @9% and is interest only. Its a 1/1 on a 28x72 lot and I’m pulling comps in the area for 125k. Its either a total gut job or a complete demolition. I want to know if A) does this sound like a deal and B) how can i negotiate a good deal with the bank. I already have power of attorney to negotiate. This will be my first short sale venture.
Thanks, Andy
If it’s a complete gut and redo or a demo… at 89k plus 17k in back payments? You’re looking at 105 purchase price (if you pay full amount and that’s how I bounce my math around. I figure it as if the bank won’t give one red cent) in an area with 125k comps? You could easily burn through the anticipated 20k profit in repairs alone. And if it’s a demo and re-construct? That’d be even worse except that then you could build a house that’s worth more… Still gonna be hard to justify your price in that neighborhood though. Just my inexperienced opinion on the matter.
When i pulled the records on the house, assessed value was only 53k. I don’t think this house would appraise for 70k. I’m thinking, because the bank will not get this sold at a sheriff sale they would accept an offer in the 60k meighborhood. Isn’t that the point of a short sale to get something rather than nothing at all?
Thanks Andy
On a short sale, start at a price that you think the property is worth. If the lender thinks the offer price is too low, they will begin a negotiating process. Also, the lender does not know what is wrong with the property, you will need to get a contractors estimate of what is wrong with the property.
I’ve seen short sales, which a person paid the bank 95,000 and the property is worth 320,000. Anything is possible.
Cliff