The bank refused the offer I brought them, insisting on another $12,000. The buyer walked and the bank foreclosed. They listed the home at $125,000 AFTER already paying fees for the foreclosure. The house just sold today for $112,000. So how did they lose $62,000? Here’s the run-down.

[Read more →]

Logically, the sweet spot on price should be where the buyer is getting a home at a little under market value (to make up for the hassle of a short sale) but where the bank is still netting more than they would if they foreclosed. In that case, all parties are benefited by the short sale arrangement.

[Read more →]

I mentioned last month that we are seeing increased difficulties and decreased cooperation from banks. This month I am working with a bank that seems to be motivated to get my short sale closed. If more banks become like-minded, short sales will remain attractive and things will keep moving. It’s a patchwork out there, though. Some banks are great, while others seem to be trying to lose money!

[Read more →]

Lately, however, I am watching many banks reject offers outright (even at amounts that they had previously accepted on the same property). With no opportunity to respond, the buyer is left either randomly increasing their offer in hopes that the bank will accept or simply walking away. Most buyers opt for the latter.

[Read more →]

Keep in mind that the bank may be losing much more than 15% if the loan is higher than the appraised value. The FHA then turns around and gives the borrower a loan at 90% of the appraised value in exchange for 50% of all future appreciation!!

[Read more →]

Buying a home that has been foreclosed can be a very good deal, particularly if you have money to invest in fixing it up. You generally end up with more in equity than the amount you spend fixing the property, particularly when you do some of the work yourself…. Even if you’re a first time homebuyer with no money for cosmetic or other repairs, a foreclosure may be within your reach with creative financing that allows you to finance the repairs based on the repaired value of the home.

[Read more →]