Do I Have A Deal Here?
Seller responded to one of my bandit signs....his mother in law is mentally ill and has let her 2/1 house go into horrible condition.
Same house across the st. sold for 113k.
He is asking 65k. I went by today estimating repairs at 10-15k.
He then told me that the loan is a couple of months in arrears....but the mother in law has no idea who holds the mortgage, what the balance is, etc.
Do I have a short sale opportunity here?
Should I even buy this house?
Any help would be appreciated.
If she is mentally ill then she will likely fail the legal competency requirement required for any purchase contract. Unless she has a durable power of attorney appointing someone to act on her behalf, the court will have to appoint a guardian to execute any such contract.
Instead of purchasing the property, you might wish to purchase the note at a discount and continue with the foreclosure proceedings. You won't have a capacity problem since title will be taken by judicial sale and not by contract.
Its going to involve a good bit of leg work and some costs. If you aren't going to make a good chunk of change, I would pass.
J
I would start at your local county courthouse.
Find out WHO owns the property. Someone had to be mentally capable enough to purchase it.
Find out what LIENS are against the property. You can also find out who the mortgage company is and how much the mortgage is for, etc.
Only then you can make an informed decision whether you should buy or pass.
Hope This Helps!
Mrs. Meltzer
One more thing, depending upon what state you live, I'd also check out the eviction laws for someone who is mentally incapacitated ... Just in case she decides NOT to move out after you purchase the property.
Mrs. Meltzer
The fact the person may have been mentally competent at the time of acquisition is absolutely IMMATERIAL at this point. The question is whether she is legal competnent NOW at the time of sale. If the person presently lacks the legal capacity to contract sale of the property then you cannot purchase the property from them absent: 1) a durable power; 2) court intervention.
J
There are rare circumstances in which a person SUDDENLY becomes metally ill.
All I said is find out HOW THE TITLE IS CURRENTLY HELD and then make a decision.
Looking at the Title documents AND the mortgage documents will give you lots of information. Not to mention that it is good to research a property before purchase, making sure there aren't any 'unknown' liens.
Hope This Helps!
Mrs. Meltzer