Preforeclosure Just Dropped In My Lap!!!!!
I am an appraiser, a client just called and needed an "emergency" fast turnaround of an appraisal. Upon asking further, the lender that this guy works for is going to foreclose on the house Saturday if they cannot get a refi done tomorrow. Not sure of the loan amount yet - working on it. Mortgage is in arrears "for a few months" now.
Assuming the numbers work (once I learn them) how would you suggest I handle this? This literally just fell in my lap 1/2 hour ago! 
It's a 1600 SF Ranch in Massachusetts. 3 br; 2 baths located inland in a seaside town. Estimated FMV is $375-$425k. Assessed at $293k. That is all I have right now.
Problem is is that you would have to get owner to deed you the property. I have people who have plenty of capital, but it seems like this one is going to be auctioned.
You need more time to do a preforeclosure deal. Best, Dave
You must also be a new appraiser. To appraise a property and then make an offer on that property is a conflict of interest. Even if you disclose these facts in both the appraisal and the offer it aint a good situation. Don't appraise and buy the property you apprased. It's sure to get you in trouble.
To help you with your practice, when someone needs you to do 'an emergency-super fast appraisal' you should reply sure, no problem, that falls under my "emergency-super fast" fee schedule.
Quote:
On 2004-01-22 13:32, sammyvegas wrote:
You must also be a new appraiser. To appraise a property and then make an offer on that property is a conflict of interest. Even if you disclose these facts in both the appraisal and the offer it aint a good situation. Don't appraise and buy the property you apprased. It's sure to get you in trouble.
To help you with your practice, when someone needs you to do 'an emergency-super fast appraisal' you should reply sure, no problem, that falls under my "emergency-super fast" fee schedule.
Hey Sammy, don't you concern yourself about my business practices. I've been appraising for years and run a large reputable company here. I am confident in my abilities as an appraiser and I am aware of where the line crosses to conflict of interest. If I were to make a move on this property I would refuse the request for appraisal as that has not been accepted as of yet. I am also well aware of the potential for additonal fees in this situation. Currently I have a decision to make, appraise the property or obtain the property. My question involved obtaining it. Should I assume that you have no input for that avenue?
sammyvegas,
Sounds like you need to get your "suitcase" out of storage.
John $Cash$ Locke
Bexo,
As I see it, Sammy didn't intend to slander your knowledge or biz reputation. He wanted to help. However, from your imprecise question, one could easily be misled into making annoying comments ala Sammy. Anyways, hard filling aside, it is up to you to decide if you want to go after the property or to make a buck appraising it. If former appears to be the goal, drive by and see if you can get to speak with the homeowner. What he tells you will probably determine if you are going to continue as appraiser or investor from that point on.
Dead deal. According to the registry of deeds this guy has been maneuvering title all over the place for years. There are several liens currently on the property some old; some new; some paid and some due. No thanks, not looking to get hung on those by hastily doing a deal in 2 days.
Beox
The issue is moot now. Based on your post, my comments were made with honest intentions. If I rankled your feathers, than accept my apologies. As Cleopatra purportedly said to Caesar, “ Jules, I’m not prone to argue”.
JLC
My bags are packed. Can I borrow your suitcase caddy------,again???? lol
New life on this!
The appraisal never happened and foreclosure begins today. I have found some leans and made initial contact under the 'guise of discussing the leans. Foreclosure is not public record yet, so not willing to discuss it with them until they bring it up or it is public. The answer I got from the owners is that the refi is going to settle the liens; I know for a fact that the refi will be too late. I have also learned from the foreclosing bank that the owners are currently 60 days past due and Feb 2 will be 90. They have been 30 days 8 times and 60 days 2 times within the last 24 months. I suspect that it is only a matter of time before they lose the house. As best as I can tell from the info. I have so far there is the real possibility of $100k+ in equity and I am the only one on this trail right now so I am way ahead of any competition. I am doing a title search on Monday.
Any other thoughts on this from all of you out there? Ways to discuss this w/ owner? Actions to take to protect myself?
Thanks in advance for your input.
est. mortgage $225k
existing lien $32k
FMV $375-$425k
I would put $375k as a wholesale price.
Have you done any comps in the area to confirm your "FMV"? Remember to make them in the last 6mos. look at sold propertys. look at days on market. Also look at the PAR report (property Archive) to see if there were any price reductions during the time of listing. Compare these to the tax appraisals on eaxh property sold. Doing this will give you a feel for what the market is doing. Oh yes, do a drive by of those props sold and compare the subject property to them. Doing this will give you a solid feel for the "TRUE FMV"
Since you are an appraiser you should have access to all this info at your fingertips. 15 mins tops. (except fot the drive-by's)
Then we can talk about if this deal has potential and how to get it if it does.
_________________
B.G. & Wheeler D. LLc Inc. and Trust
(A division of: Half Vast Enterprises)
"Most american millionairs today (about 80%) are first generation rich"
[ Edited by WheelerDealer on Date 01/24/2004 ][ Edited by WheelerDealer on Date 01/24/2004 ]
I've done this and I am confident of the values that I am speaking of.
Then why the 50k swing in your "FMV" estimate???
Because I am using $375k as a worst case scenario by keeping the numbers low. Also for a fast close cash deal; i.e. wholesale; I would let it go for that little if what I know to this point holds true.
Retail on the open market would be $425k which would take longer to attain and therefore increase holding costs.
So, with nearly $100k equity at a conservative $375k sale price, does it matter? Can we use this as the conservative estimate to get some ideas going?
I guess the question now would be do you have the funds or the credit to go forward on this deal?? Have they listed and tryied to sell yet?
_________________
B.G. & Wheeler D. LLc Inc. and Trust
(A division of: Half Vast Enterprises)
"Most american millionairs today (about 80%) are first generation rich"[ Edited by WheelerDealer on Date 01/24/2004 ]
Wouldnt it be in your best intrest to wait a little longer and sell the house retail? I think the 50K in extra profit would be well worth it. Unless you dont have the capitol to pay for more holding costs. Just my two cents.
P.S. I officaly hate you for getting such a great deal so easaly.
Granted I found it easily enough but this is still a slippery slope. Going to take lots of work to get it done the right way.
you must be very careful, that is the biggest conflict of interest only if you put it in your name. We professionals have an obligation to the people we come in contact with. I don't know how many times people in foreclosure have called me and nothing could be done to help them out. I already was talking with the bank, the appraiser, and the deal just couldn't be done. But I had to look at the consequences if I made a deal with the bank after having all the information "fall into my lap". I try to work set of principles that will allow me to succeed,(which I am in the top 1% of women in my field in my area), without crossing lines that are unethical. The quick buck is easy, but you won't make it in the long haul. I disclose my position to everyone I come in contact with. Now I have people call and ask me if I would want to buy there property and let them stay there with an option to buy the property back. This is legal because they are not calling me to help keep there house. I would research your state laws and the appraiser's set of regulations for your license, before you do anything to jepardize your livelihood
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