I am working on a ss and the property is in bad shape…I feel really bad for the owners because they have been thru hell…The owners have a condo that is worth $175K but they owe $183K…They have had problems with the unit ever since the bought it a year ago…They had sewage back ups, they had a major water leak that distroyed the kitchen, master bath, and laundry room…Everything was fixed but it was a terrible fix…My question is will the bank care that the owner sold the kitchen and bath sinks, counter tops and applicances to survive…They had a strong hardship letter that I think anyone can feel…I’m shooting for 80-90K offer to the bank…
gosh, maybe i missed something, but i would assume the bank would most certainly care about that! it should help your case. if they have done that, one must wonder what other issues the property has. if i am in your shoes, i am exploiting the living crap out of the condition and problems to the bank, and i am showing the bank pictures of kitchen and bath missing necessary components. good luck!
Thanks for the reply…I knew the bank would care but I was just wondering if it would help or hurt my case…Thanks again for your help
you’re welcome. oh, it will no doubt help your situation. banks are not in the biz of owning real estate. they are in the biz of lending money. they definetly do not want to own property that have that kind of problems on their hands. the fact that its missing things like this on top of the problems you mentioned show the mentality (desperation) of the borrower and i’m sure as they sit in their cubicle somewhere they must wonder what other kinds of things are wrong. a little truth on shortsales: the more work needed (that you show the bank) the greater chance they’ll work with you on price! good luck!
In my opinion one of the biggest myths perpetuated by the gurus.
Certainly missing stuff will lower the value but obviously increases your rehab costs by a similar amount. The lender will just look at the BPO, the won’t get all panicked about a missing sink. Not like it is mold or something.
If you are correct that the house is worth $175K then you will not get any action on your 50% offer. Not hatin’…Just sayin’…ain’t gonna happen.
Good Luck
It all depends on how low the BPO is. Make sure to be there when they do the BPO.
If he says the condo is “worth 175K”, one would expect the BPO to be in that ballpark. Sometimes even higher as Realtors have other agendas. Maybe lower.
I guess I assumed it used to be worth 200K or something and the damage has brought it down to 175K and short sale status.
Maybe he meant 175K was an ARV and then certainly the damage might lead to a lower BPO.
He’d need it to be alot lower, IMO. He can play up a missing sink and cabinets all he wants but a Realtor will know those are the easiest fixes. Spend a few grand to buy put in new ones and you are done. That seemed to be the focus of his question…if the lender will care about those missing items.
He should play up the water damage and sewage issues to them more, IMO. Those could be condo assn issues though, too.
Eric3,
I meant 175K ARV…It needs a kitchen, master bath and guest bath…It has holes in the drywall everywhere and still has water damage that the HOA has been trying to fix but the owners moved out…They had a work order to fix that months ago and they are still getting letters tapped to the door to fix it…Other units have the same problem…To be honest with the sob story that these owners have I think I can get at least 50% of the value…I’d say 80K low and high 100K…Repairs are about 20K hands down with all the issues…I should be able to make at least 20K on this deal…If I can get the bank to take 80K-100K I should be in good shape…I’ll wholesale it for 120K…The buyer can still make about 20k
If he says the condo is “worth 175K”, one would expect the BPO to be in that ballpark. Sometimes even higher as Realtors have other agendas. Maybe lower.
I guess I assumed it used to be worth 200K or something and the damage has brought it down to 175K and short sale status.
Maybe he meant 175K was an ARV and then certainly the damage might lead to a lower BPO.
He’d need it to be alot lower, IMO. He can play up a missing sink and cabinets all he wants but a Realtor will know those are the easiest fixes. Spend a few grand to buy put in new ones and you are done. That seemed to be the focus of his question…if the lender will care about those missing items.
He should play up the water damage and sewage issues to them more, IMO. Those could be condo assn issues though, too.
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Go for it. Still looks like a long shot to me but stranger things have happened. It’ll be good experience.
Eric is right. Short sales are not as easy as everyone makes them out to be. The reality is that your whole deal is really determined on the BPO. Unfortunately, the banks opinion of the property is often times correct. When the bank undervalues the property, thats when we make our money. The good news is that the bank does not have to undervalue it by all that much to make it a good deal. This is because lenders usually take a % of the BPO. For instance, lenders that I have been working with have accepted payoffs of 80-84 cents on the dollar on the BPO. Good Luck
On a recent SS I knew the BPO from the agent who did it, a friend. Just out of curiosity, when I called I asked Loss Mit, casually, what the BPO was. They told me, and it was exactly what I’d been told! I asked again on a subsequent call, and they told me again. Though it’s good to be able to control access and thus influence the BPO, knowing what it is sure helps decide what–or if–to offer, so ask, you never know.
Absolutely Loon. It never hurts to ask for the amount of the BPO. The next question should be how much do you need to net on this property?
Fortune favors the bold.