Foreclosure in Norwood>Question Details

Billm0323, Both Buyer and Seller in Norwood, MA

Pre-forclosure" question

Asked by Billm0323, Norwood, MA Tue Oct 5, 2010

Hi,
I have a question about the "price " of a home which is listed for one that is in "pre-forclosure". How do you come up with that price if it is not for sale yet?

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Answers

9
Pre-froclosures are a wait of time most people going through foreclosure think a magic genie is going to come save them so they do not think they should consider selling.
If you want an estimate of a current value of a home look it up on realtytrac.com, zillow.com or eappraisal.com
0 votes Thank Flag Link Fri Oct 8, 2010
Hi Billm0323,

When a house in in pre-foreclosure, it means that the home owner recieved a letter from the bank indicating a foreclosure date. The property is still owned by the home owners, and it may or may not be on the market. The only way it would be on the market is if the house is listed as a short sale. If it is listed as a short sale, either the listing agent determines the price, the seller determines the price, and/or the lender determines the price.
Also, the house may never reach the market or be for sale. If the homeowners negotiate a loan modification, you may never see this house reach the market. Please be careful about buying a bank owned property. You should hire an attorney and pay close attention to recent news regarding illegal foreclsoures, title insurance and more. You can go to cnbc.com and search "illegal foreclosure" . You'll see the latest debacle here. Oh..and happy house hunting. Call me if I can help you. No pressure. 508-878-0917
Web Reference: http://southeastmahomes.com
0 votes Thank Flag Link Fri Oct 8, 2010
Hi Bill!

Your question is a bit confusing. If it's listed, it's likely a Realtor pulled some comps or did a CMA based on other distressed asset sales in the area. If it's not listed, I would find out what the homeowner owes on the property and calculate an offer. If they owes less than what it's worth, you will want to offer enough to cover the payoff to the lender. If they owe MORE than what it's worth, then it's likely that the lender will approve 10-20% off of the BPO (Broker Price Opinion) which will get ordered by the lender when the property is put under contract and the short sale package is submitted.

It really depends on what they owe on the property. Homes can be in preforeclosure at this point and homeowners owe less than what it's worth.

Keep in mind your offer is to the homeowners...NOT the lender.

Good luck!
0 votes Thank Flag Link Wed Oct 6, 2010
Just because a home is in pre-foreclosure does not mean you can buy it, The current own has many options to save their home maybe they will consider a short sale offer but I find most people do not want all kinds of people knocking their door down trying steal their home.
0 votes Thank Flag Link Wed Oct 6, 2010
Bill,

I am both an appraiser and broker and am happy to give you the information your request either call me or email me. As to a price for a home that is pre-foreclosure may be a mute point if the owner does not want to sell the home. As the makret value of the home may be far below what is owed to the bank. Typically in MA banks end up buying the home is it does go to foreclosure as they have certain obligations to their stock holders. Once they own the property they can sell it for what ever they want. ie: what the market will command.

There are also benefits to a purchaser buying from the bank vs at foreclosure, clear title, delivered vacant, may even repair what is wrong.

So as you can see there is no easy answer as to price, that said I can tell you roughly what a bank will consider as to value for loan purposes. Remember each appraiser looks at properties and comps a bit different, so you want someon familar with your market. Which I am.

Louis 617-799-3326
0 votes Thank Flag Link Tue Oct 5, 2010
Not sure where you saw the online ad--if you are referring to a RealtyTrac ad, do keep in mind that information may not always be accurate and oftentimes can be misleading--you could be looking at a lis pendens property--notice of default--or some kind of other fee--some of those properties may not be for sale yet, and some may never be, if the default is satisfied by the owner. If you are interested in foreclosures, work with an agent--he/she will have access to reliable information--also don't overlook traditional sales as some may turn out to be a much better bargain than some of the foreclosure properties.
0 votes Thank Flag Link Tue Oct 5, 2010
The fair market value of a property can be obtained at any given time. It is the basis for BPOs and appraisals. Getting comparable properties is key in arriving at a price, i.e., similar size, age, style and general condition. Typically, you would want to get comps that are within one mile of the subject property and within 200 sq ft of the property's square footage.

In listing a short sale or even a bank owned property, the list price is generally within a certain percentage (about 10%) of the fair market value.

Hope this helps.
Jane Pacheco
510-791-7644
0 votes Thank Flag Link Tue Oct 5, 2010
Depending on the source of the data some might also be just one of the mortgages that's in default. Sometimes it's absurdly low because it's the 2nd mortgage that's being quoted as the pre-forclosure price. You can usually find out more details at the local registry of deeds run by the state. It's also available on line

Hope that helps,
Web Reference: http://www.MedfordHouse.com
0 votes Thank Flag Link Tue Oct 5, 2010
Bill: There has to be a Broker Price Opinion submitted and a price is arrived at by looking at "Recent Sold Comparables", in the immediate area of the home that are the same or similar, number of bedrooms and square footage.

It's the same information that is used by an appraiser. Don't try to look at Sold prices on line in the public sites because they use information from the Tax Assessors office that state the Trustee's Deed price which is much different than, "Recent Sold Comparables".

Find a Real Estate Agent in your area that subscribes to the MLS and have them tell you what the, "Recent Sold Comarables", are for any home you are considering that does not have a price yet.



~~~
0 votes Thank Flag Link Tue Oct 5, 2010
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