Short Sale Question
I have a house in my neighborhood that is worth about 180 - 200K. The house has been vacant for some time and I have talked with an agent regarding the house. She stated that the previous owner has been charged with credit card fraud and is in jail. Because of this there are several liens from the various 'scammed' organizations, plus the mortgage company and US Govt(?!).
How do I validate this information? Do I have to do a title search to get the accurate information? Need to know the amounts before I can decide if the work is worth the reward.
Has anyone dealt with a property that has alot of jr liens and what can you get away with in regardings to shorting them or getting them to drop?
Is there anything else I should be looking into or considering?
Thanks,
Dan
Dan,
You should definitely do a title search on this property. You can research it yourself, but a title search can catch things you may have missed doing your research on the property.
Gather all the information concerning the leins and also find out who the mortgage company that has the senior lein on it. You can then call the junior leinholders. Tell them you are interested in purchasing the property, but due to the amount of repairs needed to fix the place up and make it marketable again...you can only afford to pay them $1K from the $5K lein.
You need to first decide the maximum amount you are willing to pay for the property before negotiating with any leinholders.
For example:
FMV = $200K
1st = $150K
2nd = $30K
3rd = $10K
4th = $5K
Repairs = $10K
Amount you are willing to pay = $120K
When negotiating, always make your initial offer low. You can always bargain up, but you can't bargain down. Also, since you spoke with a real estate agent, then you have to figure in their commission. Good luck.
Tanya