Opinions, Please
I know my judgment is clouded by my desire to help these homeowners, so I’d like feedback on this.
3 bed, 1 bath with a finished room in the basement that can’t qualify as a bedroom.
Assessed for taxes at $96,000
Appraised for the mortgage in 99 at $92,000
Unpaid principal is $72,000 and payoff is $88,000.
Ex wife has a lien for $5,000 and could probably be persuaded to take less, but she won’t write it all off.
FMV $87,000 as is
ARV $95,000
The house is not in horrible shape, but the homeowner has multiple half finished projects throughout the house – replacement countertop for bathroom that has not been installed, new windows without exterior trim, a basement room half framed and drywalled, and on and on. It would take about $5,000 for new carpet and materials to finish the projects if I do all the work.
Lender is Centex. Talked to them about a short. They require an appraisal (they pick the appraiser) for $450 and financial statement from the homeowner. Appraisal is reviewed by their internal committee of former appraisers and I was told they would likely accept offers close to their value determination, but it was also intimated that the appraisal would likely be less than $92,000.
Homeowner is delinquent but it’s not yet scheduled for auction. Annual salary is $38,000, 4 kids so I don’t think showing financial hardship will be a problem. He has been trying to sell it himself for a few months. Had an offer for $105,000 from a person who had sentimental attachment to the property. Deal fell through when funding collapsed. Two other oral offers – one for $90,000 and one for $95,000, but nothing in writing.
70 percent of the $87,000 FMV is $61,000, which according to the posts here, is what I should be aiming for. My gut tells me Centex is not likely to accept that. I’m not sure if I am trying to talk myself into spending the $450 for the appraisal because, as I said, I like these people, or if it’s worth pursuing.
What are your intentions with the house? Rental? Are you going to hold it for seasoning and then sell?
You have to take these into consideration to figure your "holding costs". And then determine what you can buy the house at and still make money.
Be careful though, it has got to be a win, win, win situation for everyone. If you lose because you paid to much, the deal is not good - no matter how much you like the people (unless of course you have money to toss to a good cause).
My goal is to re-sell, not hold.
Id stay away. Youve got two problems one is centex the other an ex-wife. Centex could cost you 450 right off the bat without even getting started by not wanting to accept a short pay.
Wife might wanna be difficult after youve put a bunch of time in it and not accept anything less than her lien value, which could include extra interest, late fees, collection costs.
Maybe someone has dealt with centex and could give you an idea about how low they go... but otherwise id stear clear of this one.
It's true the ex wife is a problem, but I wouldn't go very far without getting a commitment from her.
Any other opinions?