I posted a message here a few days ago and recieved some good advise. I have an update.

A little background... Have a house in my area (VA) that the owner stopped making payments on and moved out. House has been sitting for about a year. I have talked to the bank that did the original loan and they are about 30 days before forclosing and putting it out to auction (I think that is the law in VA). The guy at the bank said that if I could find the original owner that I could make him an offer and could do all of this before the forclosure and it would make life easier for everyone involved. I found him and he wants to sell.
Now for the question...what should I offer this guy? The property has been sitting for a year, it has some tree damage from hurricane Isabell (Sept. of 2003). The roof has been repaired but that is about it. Is there a percentage that I can expect to knock off? Will the bank take a bid for LESS than the original loan?

The advice I recieve here earlier said that PRE-forclosure was the best way to buy property. Is that the stage that this is in?
Thanks again!
MrS

The advice I recieve here earlier said that PRE-forclosure was the best way to buy property. Is that the stage that this is in?
Thanks again!
MrS[/B][/QUOTE]

This property is already in the foreclosure process. It just hasn't gone to the sheriff's sale yet.

It sounds like the owner is not trying to redeem the property or get it listed to avoid having a foreclosure on his record. It may have been a rental property.

I would suggest finding an agent to work with you on the buying end. He/she will be able to provide you with a marketing analysis at no charge. It should take the damages and other problems into account. This will give you a good idea of what the property should sell for "as is". This is most likely the condition you would be buying the property since the owner has let things go this long.

Your agent will also be able to advise you of other important details pertaining to the purchase should you decide to pursue it. These could be liens on the property, a second mortgage, etc. The agent will pull an Owner's & Emcumbrance report to find out more...at no charge to you.

Good luck with this venture. Keep us posted on the progress.

Beth Freeman
Coldwell Banker
Littleton, CO

What the bank is talking about is a Short Sale...
Request their Short Sale Package if they have one and if not you need to work with an agent / broker who deals in REO work. They can provide a supporting BPO for the Short Sale. You must know what the Market value of the property is in its AS-IS, Where-Is condition... what the repair cost would be to bring it to the average market condition and what that After Repair Market price would be. All of this would be documented in the BPO with supporting photos of damage.

I normally go for 50% of loan value or 50 to 70% of what As-IS market value is. Short Sale Offers are normally ALL CASH... it is Very hard to talk Short Sale with a bank without Cash in hand... this is one place that Cash talks and mortgages walk. This is also one of the most lucrative Investment opportunities. I did 2 of these this week, well actually started Saturday and finished with the closing today..5 days. Investor I am working with will make about $23,000 on each property after repair cost in about 3 weeks. I also buy several every year for my self and flip or Lease Option.

Key point is you need to locate or become the knowledgeable Broker Agent for Short Sales. This is not only profitable but a lot of fun. Of course the hard part is finding these opportunities... that is a whole different suject.

Please explain what's in a Short Sale Package. Also, when you say cash, do you mean the banks won't accept an offer contingent on financing, closing in less than 30 days?

Thank in advance.