Question about a short sale and I'm a 1st time buyer

Asked by Rob, Portland, OR Thu Sep 29, 2011

im looking at a house to buy and I spoke to neighbor and she mentioned she thought it was going into foreclosure in Oct. They are asking a $145,000 and my realtor is setting up a showing on friday for me. Well after reading more about real estate online I discovered that the property is set to be auctioned off at the courthouse next week. Well I'm new to all this so trying to get a 101 on this. Asking is $145,000 it's value is about that that I've or take what sites I view. I pulled the records and they owe about a $196,000 on the house, and it's been sitting for 6 months. I'm trying to figure out what to offer for the house, and if I can? I've read 20-30% off what's owed and 20% off the value. Can anyone help and what to expect, and what my best shot is? Does bank prefer to sell it now, and what will it cost them if it forecloses? What's realistic?

Thanks for any help

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Chuck Simpson, Agent, Gresham, OR
Mon Oct 10, 2011
If the home is going on the block next week, you might want to get an offer in right away, and see if the listing agent can forestall the sale. At this point it's not likely, buy you never know. If you have cash, you can always go to the courthouse, as an option. I am a Short Sale and Foreclosure Resource, and have the SFR certification from the National Association of Realtors. Been doing short sales and foreclosures for about ten years.
Feel free to contact me with any questions.
Chuck
0 votes
Rob, Home Buyer, Portland, OR
Thu Sep 29, 2011
Shanna,

Ya that's what I'm wondering what position is this house in? I guess some of my questions will be answered when and if I view the place. Ty
0 votes
J, Agent, Greensboro, NC
Thu Sep 29, 2011
One important question that comes to mind is does the property even qualify for a short sale option. Any home owner can list a property as a short sale, however, that does not mean it can be sold as a short sale option. I would suggest getting your agent (hopefully versed in short sale options) to question the seller's agent in detail to determine the "actual" position of the property with the bank. This will save you endless time and energy if indeed the bank would never accept a short sale on this particular property. Good luck!
0 votes
Jim Casagran…, Both Buyer And Seller, White Plains, NY
Thu Sep 29, 2011
Rob,
Good luck with your short sale. While I don't have any expertise in short sales, my fiance and I are about to complete our first home buy ourselves.

We wrote a blog with some tips which might be useful for you, even though we didn't go through a shortsale / foreclosure.
0 votes
Rob, Home Buyer, Portland, OR
Thu Sep 29, 2011
My realtor didn't volunteer any of this information as far as the status of the property, but I didn't mention neighbor telling me bout foreclosure, he just stated it doesn't matter what the financial situation is all the matters if lender will accept a shot sale. I ended up finding out bout courthouse auction, and the financial info and about the postponement so I don't know if any of my info matters, or maybe he should of been one to tell me out all this
0 votes
Rob, Home Buyer, Portland, OR
Thu Sep 29, 2011
Thanks for the advice help Marie, and Shanna.i was hoping there would be a very easy answer :) just my like, and I'm learning nothing is easy when buying a house and finding something one likes. Too old, don't like surrounding houses, area, cost, to small, no parking, to much money etc etc. I like this house small mid 90's affordable, nice area, newer inside, so I just wanna put my best foot forward
0 votes
Rob, Home Buyer, Portland, OR
Thu Sep 29, 2011
Thanks for the replies everyone. I called the courthouse the auction got postponed till novemeber. As far as comp same size and bedrooms it averages out to about $145,000 average. Now I'm trying to figure out since it's been on marker for 6 months, and $196,000 is owed and there trying to sell it at $145,000 well does that mean bank/3rd party has already approved to sell for less? My other question is what loss does the bank have if it goes to foreclosure and sold at auction? A lot less money at auction? Are there costs to put back on the market if they choose to do so? I'm trying to figure out what position I'm in? I've read to offer 20-30% less than what's owed, or 20% less than it's asking price. I'm trying to figure out where the bank stands and where I stand?
0 votes
Shanna Rogers, Agent, Murrieta, CA
Thu Sep 29, 2011
Hi Rob,

If the Auction is scheduled for next week (have your Realtor confirm that with the listing agent) the bank most likely will NOT postpone the Auction because it's too close. However, if the Auction is at least a few weeks away, you might try submitting an offer if you like the house and want to purchase it. As for the amount you should offer, have your Realtor do a Comparative Market Analysis (CMA) on the property (or any future properties you may be interested in) using SOLD comps within a 1 mile radius of the property (the closer, the better) that have SOLD within the last 3 months. This will give you market value and this is what you should base your offer on - not list price or any formula.

Good luck.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes
Alex Lopez, , South Florida, FL
Thu Sep 29, 2011
Frankly, if the property is set for auction next week then chances are that you won't get it as a short sale. Banks do not initiate a short sale within 3 weeks of a scheduled auction unless the offer was already on the table.

Check out our website http://www.priorityshortsales.com we can help you and your real estate agent process and close any short sale deal in timely, smooth manner. Short sales are a great way to get a bargain, you just have to know the ups and downs and go into the deal educated.
0 votes
Marie Souza…, Agent, Centerville, MA
Thu Sep 29, 2011
Rob - Ask your Realtor what the home is currently worth. They have access to the MLS & can come up with market value. There are no "correct" answers about short sales, as every bank & situation is different. Your agent should educate you to the process of purchasing a short sale/bank owned & auctions, as they really are a specialty.
Best of luck -
The Marie Souza Team- Top Selling on Cape Cod
508-790-2000
info@mariesouzateam.com
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