1ST TIME BUYING AND FROM FAMILY FRIEND
My main question is about how to make a offer to this family friend(not REAL close,but friend and neighbor)before the sheriff sale, but first a little history.....
property in question is 4.3 acres with home, assessor valued at $94,400(I know that may not be actual value). Info from courthouse states:
The court enters Decree of Foreclosure. The total indebtedness due and in default as of Aug. 17, the amount of $11,783.81, without relief from appraisement laws, which sum is secured by the second mortgage sought to be foreclosed herein.
Now I understand that there may be a large 1st mortgage, and I am awaiting info on that right now. That will be my deciding factor of making a offer before the sheriff sale (scheduled for late march), but if I make a offer before that, does anyone have any advice on how to proceed or what to say? The home would be purchased with the intent of repairing and selling the property with a partner. It is somewhat in distress, needing ALOT of cleaning and some repair. Any help would be greatly appreciated. Maybe I should just wait for the sale?
You should wait to see what the first mortgage is for. If you make an offer to purchase you be in trouble if he has a huge first and no equity.
If he is your friend, ask him if he is interested- if he says yes, ask to see his mortgage coupon for his first... do the math...
[ Edited by hoeland on Date 02/20/2007 ]
Why do you have to wait?... can you just walk to person in pre-forclosure and ask for his latest letter from bank showing the balance?.... If they are your friends, maybe this is not a problem. Explain to him/her the damage on their credit if they loose property to forclosure. If the balance on mortgage is small enough, maybe they can move out of property with some cash in their pocket... just explain to them what happens at forclosure. Due diligence on property would have to be done before buying...
In a short sale the family friend you are looking to purchase from can call his current lender i.e. Countrywide, GMAC, etc. He will then negotiate a price with the lender that they will accept to pay off his mortgage. Your friend will still take a hit to his credit but being that he is looking at foreclosure anyway the hit would not be as intense as foreclosure. Gather all of the information. Does he have the property listed or would there be an agent involved? He will need to figure out what the bottom line is for the home, mortgage 1, mortgage 2, and what the realtor expenses are added together. That will be the price he needs to sell the home for.
As for value of the home and what you should pay for it. I would recommend getting an appraisal or looking over the property with a reputable realtor that knows home values in that area. Then if the current value vs. the price of the short sell pencil out then go for it.