I recently put a bid on a home where the owner is deceased. He had a reverse morgtage and owes 200,000 - The

Asked by , 08065 Fri Jun 13, 2008

list price for the home is 159,900. The home is in need of a tremendous amount of work. I offered the reverse mortagae holder (bank) (through my realtor) 100,000 cash AS IS. It's been a week and still no word. How can the decedent owe more than the home is worth? Is the reverse mortgage company in the wrong for lending him more than actual value? What do you think are my chances are of getting the home are? T in New Jersey

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Corey Grushin, Agent, East Brunswick, NJ
Fri Jun 13, 2008
T I'll try an answer all of your questions: The decendant can not owe more than the the house is worth (a reverse mortgage is a non recourse loan) meaning you can't pass on a debt to someone else. The reverse mortgage company can not lend them more than the house was worth at the time the loan was taken out. What happens is the loan accrues interest over time that is added to the original loan amount, so in a declining market or in a case such as this with a home in disrepair the amount owed exceeds the value of the property. The chances of getting the property are good but your offer may have to be increased. They would want something reasonable close to the appraised value maybe 110 would do it. The decendant can make the callon this without the banks approval as well, as long as the sale price is fair market value.
1 vote
Paul Howard, Agent, Cherry Hill, NJ
Mon Aug 18, 2008
If it is the house I think it is the original asking price was 179,900. It has been on the market for 4 months and the price reduced shortly after it was listed in April but not since. The agent has done a poor job of marketing by not including photos or room sizes. This may work to your advantage as many buyers won't bother to look at it. It is odd that these were not included. Make sure your offer was presented. I don't know why they would accept it though since they could do much better just by reducing the price some more and adding the detail. (assuming I'm right about the house).
A 4 BR cape in that area would go for 180,000 to 230,000 in decent condition.
Paul Howard, Broker
NJHomeBuyer.com Realty
Cherry Hill NJ 08002
0 votes
Corey Grushin, Agent, East Brunswick, NJ
Sat Jun 14, 2008
T sorry for the delay in getting back to you it has quite hectic yesterday afternoon with the markets. Yes the bank can counter, but here's a question for you: Did the deceased have a will and leave the property to someone? If so are they the ones who have the property listed with a realtor? You can wait for them to get back to you but if you want the house you may have to go GET IT. Yes the bank can take other offers on the property if their is no contract in place. T I'm also not a very good typist, I will gladly explain things to you (regarding your options and my question) this is a little diifferent than other short sales so give me a call and I'll explain 973-769-2572
0 votes
Debt Free Da…, , 85260
Fri Jun 13, 2008
The quick answer is property values have gone down. Millions of homes accross the country are upside down.
Web Reference:  http://GetPrequalified.com
0 votes
John Sacktig, Agent, New Jersey, NJ
Fri Jun 13, 2008
First, one week, when dealing with a bank owned property is not uncommon. Sometime it take s2 -3 weeks just to get an answer on an acceptance or a counter offer. It just takes tie since you are not really dealing with just one person.

Second: The reverse mortgage on the house was probably done a while ago when the market was strong and the house may not have been in disrepair. IN order for ta reverse loan to even go through there had to be appraisals and comps to justify the mortgage.

This happens situation happens. Now it is just a matter of time for the bank to decide on your offer .. either they take the hit.. or they will decline. Wait it out and be patient. You will find out one way or another.

You may have a shot. Good Luck!
0 votes
, Home Buyer, 08065
Fri Jun 13, 2008
Corey...Since I put this bid in can the bank counter offer with a higher price if that's what they want? Should I wait for them to get back to me with the first 100K offer? Can others place a bid and them sell it to someone else even if they didn't get back to me from the first bid? I want this house bad and am willing to go up to 120k to get it...how long should i wait to hear from them...I'm calling my agent everyday, and everyday she still hasn't heard back from them.
0 votes
Jeremy S. Hi…, , Cherry Hill, NJ
Fri Jun 13, 2008
You never know how things will work out when the house is upside down. These things do not happen quickly especially if the bank is unaware of the house current condition and market value. How old is the appraisal and who did it? Was this done by the bank or by yourself? I hope it works out well for you.

Best Regards,

Jeremy S. Hill, Realtor Associate
Keller Williams Realty
1814 Route 70 East
Cherry Hill, NJ 08003
Office: 856.685.1651
Fax: 856.321.1414
Direct: 609.876.5817
"Your Interest 1st Always!"
0 votes
, Home Buyer, 08065
Fri Jun 13, 2008
0 votes
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