Question Details

David, Home Buyer in Danville/San Ramon

On Realty Trak, some foreclosure property show market price while others show loan balance. Explain.

Asked by David, Danville/San Ramon Sat Apr 12, 2008

For all the foreclosed property listed on Realty Trak which show the property priced at the owner's default loan balance, do the homes actually sell for this price (based on past home sales on foreclosure property)?

Are banks willing to sell the property at the remaining loan balance? How true is this for San Ramon/Danville, CA homes?

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Answers

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Hi David. If I were you, I would not pay attention to all the properties that only show loan balance. RealtyTrac shows properties that are in different stages of the foreclosure process. All the properties that only show the loan balance are those that just have a notice of default recorded (in CA) and unless the property is listed with an agent, it's very difficult for an individual to work with the banks on a short sale. I say difficult because the lenders usually want to see that the property was marketed at fair market value and if the property has never been on the market, you can't show a listing history. Furthermore, you'd have to contact the owner of the property directly and help the owner deal with the bank to work out a short sale. While it can be done, it's a route that only seasoned investors with short sale negotiation experience should attempt. You also have to remember that the loan balance that you see on RealtyTrac is only the loan balance of the lender that has filed the notice of default. If there's a junior lien holder, and many times there is, then the senior lien holder can't approve a short sale for only the outstanding loan amount on the first without the approval of the junior lien holder. On the other hand, once the house belongs to the lender, they can sell the house for whatever amount they want to, but they'll always try to recoup as much as possible. I hope this helps.
0 votes Thank Flag Link Sat Apr 12, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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