Short Sale, What To Offer?
Just a quick question? When you are doing a short sale, what do you usually offer? 10, 25, 50 cents on the dollar? I have a house (modular on perm. foundation) where the owners died and the garents (heirs) can't make the payments and are going to let it go back to the bank. The problem is they owed 70,000 on this and it is probably worth 55,000. The bank is interested in doing a short sale but I am wondering what to offer. (does need a little work in & out).
any advice or info. Please?
A benchmark:
senior mortgages: Under certain circumstances, the FHA will agree to approve a preforeclosure short sale such that the FHA insured mortgagee nets about 85% of the property's confirmed, as-is, fair market value. The majority of first position mortgage lenders asked to consider accepting less than they are due recognise that benchmark as an industry standard.
junior mortgage(s) Since junior positions are more at risk than senior loans, their criteria for accepting short sale are less rigid. The might agree to accept pennies on the dollar instead of seeking to protect their interest in the property.
[addsig]
You need to determine the following:
Current Value as-is
estimated repairs and cost
after repaired value
Determine these three things both on the high end and the low end as you want to structure your numbers to the bank to get the lowest possible purchase price.
If there are junior lien holders you can usually get them to accept a very low payoff. A general rule is 80% of the BPO for the 1st. This will leave you with a good deal providing the BPO is accurate.
You also need to plan your exit strategy and be prepared to close with cash in 30 days or less. Somtimes you can say hey i'll close in 7 days if you give me a payoff for X.
GOOD LUCK. I am not an expert in this so others may have more qualified advise on short sales.