Posted by Pam, on November 21, 2003 at 14:29:48:
Kevin, do you mind me asking what area of Illinois you are from? We are new at REI and read the forums as much as possible. We are from central Illinois so your post caught my attention. Thanks
What should I offer? - Posted by lexan97
Posted by lexan97 on November 21, 2003 at 13:27:16:
Seller has a house worth $350,000 and still owes $300,000. Payment is $2,000 and rental in area is $1,300. He is already 2 months late and wants $6,000 for him to give me the house.
What should I do? Short sales and take over payment?
Re: What should I offer? - Posted by Randy (SD)
Posted by Randy (SD) on November 21, 2003 at 13:58:53:
What is the basis for a short sale? If the market rents are $1300 a month, and in order to cash flow this property you would have to have your payment around $1000 (assuming that includes taxes and insurance). At 7 percent interest a $1000 payment will support to a loan for 150 K., I doubt they’ll take 50 cents on the dollar.
Also you should know and in the case of a short sale of the seller gets $0.00. No lender will structure a short sale when the seller is to receive any proceeds from the sale. It is in the best interest of the seller to expect nothing except to stop the foreclosure and preserve what credit they may still have.
What is the demand for $350,000 properties in your market? If your market is strong and you have the $4000 to cure the deficiency, you might consider offering the seller a sub2 and take over his payments and pay him his $6000 when your buyer exercises their option to purchase the property in one to two years. Otherwise pass and find another deal.
Offer to call back when he’s motivated - Posted by Kevin IL
Posted by Kevin IL on November 21, 2003 at 13:52:09:
$300k + 6k + 4k(back pymnt)= $310 on a house worth $350k? that gets you in for 89%of market value. looks a little slim.
If you short sale you will not be able to take over payments. You’ll need to payoff the mortgage for the negotiated amount.