What does it mean when house was foreclosed for X amount of money?Yet the asking price is more than "X"?

Asked by Nchome, Charlotte, NC Mon Apr 27, 2009

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4
Paula Prince…, Agent, Rogers, AR
Mon Apr 27, 2009
There are several methods of pricing foreclosures. I would say that the additional amount could be rationalized do to legal fees and other maintainance cost. But the balance of the mortgage will have little to do with the actual value of the property. So many people had second mortgages and their debt exceeded the value of the home. So, my advise is to check property values in the same subdivison. Look at the number of properties listed. Are a majority of these properties existing residential resales or are they foreclosures? Get data on the actual sales price of properties sold in the area in the last 6 months. I wouldn't use data older than that.
Be aware that some properties come with "deferred" maintenance. Some of these issues will make the property not eligible for financing through FHA or VA. Get a good agent with a proven track record of closing foreclosures for their clients. Don't be shy to ask for references. Good Luck!
1 vote
Keith Manson-…, , Milwaukee, WI
Tue Apr 28, 2009
Each property that goes to foreclosure sale is bid at different amounts depending on the bank and the investor of the loan. Some investor try to get other bids at the foreclosure sale with a lower bid. If no one else bids on the property then the lender wins the bid at the lower amount. Then the lender will market the property at market value to mitigate their loss.



Keih Manson
First Weber Group
Certified Distressed Property Expert
Greenfield, Wisconsin
0 votes
Dot Chance, Agent, Burbank, CA
Mon Apr 27, 2009
Even though the foreclosure amount is X the market value is often greater than X. The property generally sells for market value.
Web Reference:  http://www.DotChance.com
0 votes
Kari Shea, Agent, San Diego, CA
Mon Apr 27, 2009
Hello,

The foreclosure amount is usually in the amount of the loan. If the loan amount was $100,000 and the fair market value of the home is $300,000, they will list it for $300,000.

The two valuse are rarely related. The may only be related if the loan amount was $300,000 and the fair market value of the home is $300,000.

Let us know if you have any further questions.

Best regards,

Mark and Kari Shea
San Diego Real Estate Experts
Foreclosure, Short Sale & Investment Specialists,
Development Opportunities & Traditional Real Estate
0 votes
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