Posted by Joe on February 13, 2004 at 03:36:16:
Just wait for the package. I take it that this “workout package” is for the short-sale of the property, and not for the sellers to “work out” a payment plan to reinstate their loan. I’ve never heard it called a “workout package”.
He’s pushing you around, by the way. Offer what you would like to pay, including a nice profit for you. Maybe subtract a couple thousand for negotiating room, in case you have to raise your offer during negotiations.
They arrainge & pay for the BPO and, I’ve never had an inspection as a requirement. You want to buy it, not take on the bank’s responibilities. Send them some scary pictures with the packet, of all the repairs needed, and your rough estimates for the repairs in a spreadsheet. It’s up to you to show them the mess, and make them see the house isn’t worth as much as they think. Put it all in a report folder with a cover letter, and you’ll make big points for professionalism. It helps, because usually the paperwork comes in a big disorganized pile.
Also, don’t be surprised if the BPO comes in much higher than you expected. Don’t let it throw you. Stay your ground and argue (on the phone) that the BPO is unrealistic. Just look at the pictures. Be present for the BPO inspection so you can point the realtor to all the bad parts of the house.
I once put in an offer for a house for 60K and the BPO came back 90K. I talked with the loss mit person, who remembered me by then, and told her I might be able to come up a little, but no where near the BPO price. Negotiate. If you’re friendly with them, they may even tell you the actual bottm price they’ll accept (from upstairs). She ended up telling me if I came up to 62K it would go. That kind of cooperation comes from respect for your efforts and professionalism. To hell with the BPO.
Just because they tell you they won’t sell it for under some figure, doesn’t mean they won’t accept a lower offer. They negotiate every day, and are happy to get them sold instead of REO’d. Taking a property through foreclosure is and expensive process for the bank, and having too many REOs on the books gets the bank regulators upset, so they want you to buy it.
Good luck. It’s not to late to save this deal. Just don’t let them dictate the price. Don’t go over your top price, or it won’t be worth it. Tell them so. “If I pay anything over $XXXXX, my profit will be even smaller than I’ve already made it. It wouldn’t be worth the time needed to rehab the house.”
Anyway, good luck learning. Keep us posted.
I could go on.