Costs Of Foreclosure
Are there any Rules of Thumb to use in explaining the cost of foreclosure to a seller? Once the bank takes the house and sells it, do any of the legal costs, etc. stay as debts to the seller?
Molotov
THe legal costs are usually paid for by the bank, thats why the judgement cost is usually more than the actual price of the house. Its to cover laywer costs and all other expenses
[addsig]
The legal costs, along with any accrued interest, costs of preservation, title, etc. are added to the principal and incorporated into the final judgment. This becomes the amount owed by the debtor/seller. If the highest and best bid happens obtained at the judicial sale happens to be less than this amount, then the lender is entitled to pursue a defiency judgment (provided the borrower has not been discharged of his/her debts in bankruptcy) against the debtor/seller. If the bank ends up getting MORE for the property once it sells it as an REO, its likely it won't be able to pursue any defiency since it would be made whole.
J
What I would like to know is dealing with these foreclosures why is it a lot of the banks recently just hold these properties, let them deteriate and wont deal on them? Don't they have any smarts whatsoever?
Many I have tried to buy just get pissed off. They want full retail value for the home and even if I offer all $ that they got into the property from purchase at auction and all the stupid fees the rep for the bank gets all pissy!
I get so frustrated. I don't pursue these more that a few times (why waste my time with these doofs) but with all the foreclosures here lately I just don't get what their problem is!
HUD foreclosures can a lot of work but at least they (the reps) can be worked with on these type properties!
Jorge121 makes a good point that you can use with the seller. If there is a high number of foreclosures in an area it will mean less of a selling price. The bank will be forced to sell at a reduced rate and can or will pass the loss on to the original owner. Very good selling pitch.
Dreamin you are also very correct. Banks have gotten so big that they have forgotten the reason they are here. I tried to deal on a foreclosed house need 15,000 in repairs. They listed it at 67,000 which was 5,000 over FMV. I provided them detail doc about rehab cost and what comps were. They responded that they would get back to me. 1 year 3 months later the property still sits listed by the same agent for the same price. I called the bank and was told to talk only to their agent. Called him and asked about moving on the price he said he would like too but the bank won't move. Long story short banks are not the best sources anymore. My 2 cents......
I agree with you guys, shorting has become a little more difficult, especially with the larger banks. The good news though is that there is still a LOT of money to be made with Short Sales. On average, I successfully complete 3 out of every 5 Short Sales that I negotiate. It is a little more work and frustration, but the payday is certainly worth it.
For those of you who have completed Short Sales before, dont give up. Keep Shorts as an option as you contine in the business, and work them when you get them. The worst they can say is no, and the best they can say is CHA-CHING!
Best of Success!
BAMZ