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Old 09-14-2008, 12:01 PM
 
25,352 posts, read 37,533,691 times
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Yesterday I spend some time looking into a few mortgages on homes I'm interested in and which are listed as short sales.

What i found out is such a mess and even more shocking than what I previous knew about the mortgage mess.

One had a divorce, IRS lien, County Clerk Lien, Hoa Lien, 2 Mortgage lenders, and this person owed 100% more than he paid for the house and the house is worth less than what he paid for it....even with the listing price which is almost half of what this person owes, IMO the lender will neveragree on a price like this, since you have to add the 18% on top of most liens, etc....

The second had only one mortgage, after refi, for the 3rd time while this person started with a "normal mortgage" and now eneded up with a mortgage that is also twice as high as what he paid for the house.

The 3rd, was also refi for the 3rd time and this last time in 2007 when the market was down, refi by Countrywide for double than what he paid to the builder and in 2007 the market value was still more than what this person paid in 1005, but so much lower than what Countryiwde gave them....!!! Unbelievable.

The next 2, I looked at was just similar but the last one already had notice of foreclosure so soon to be bankowned.



I wonder how any of these nice listed sales prices will ever be able to get a deal done other than foreclosing and sold as bankowned, specially since the market value is higher than what they are asking. I assume that these different realtors just see this as advertisement and try to get customers through the door and have their deposit in an account for a long time.

If I'm worng, I'm glad to hear another view on this, but to me the lenders who refi these people in 2007 are just as responsible for the mess, because at that time every one knew what was going on and how can Countrywide have given this exceptinal high loan for a property that wasn't worth it.....is it a bad appraiser, but even if it was...Countrywide should have know in that time frame there was something wrong!
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Old 09-14-2008, 12:21 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,596,336 times
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property values are based on comparable sales in the area. Foreclosures and Short-sales do not effect the value of homes with in the area. they are considered distressed property.

Also remember that 80% of all short-sales never go through.

now you see the advantage of buying a home through foreclosure instead of short-sale. it will at least had a clean title.
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Old 09-14-2008, 12:38 PM
 
25,352 posts, read 37,533,691 times
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I know a foreclosed home purchase will go much faster. I myself bought a short sale this year and there was also a high mortgage on it, but at least this seller wanted to get out and knew she could get out with taking a judgment and still owning some money, but keeping a better credit score and getting the deal done....most short sale I have asked about are with seller involved who just want to walk away with no judgment and having the banks deal with the money they wasted on luxurious items....in these cases I rather wait until they foreclose and deal with a bankowned property.
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Old 09-14-2008, 02:10 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,101,771 times
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Quote:
Originally Posted by brokerdave View Post
property values are based on comparable sales in the area. Foreclosures and Short-sales do not effect the value of homes with in the area. they are considered distressed property.

Also remember that 80% of all short-sales never go through.

now you see the advantage of buying a home through foreclosure instead of short-sale. it will at least had a clean title.

I wouldn't say that in general. Because almost 70% of all purchase transactions in Vegas over the last few months have been bank-owned homes, they are the market and absolutely reflect fair market value. Not only that but at least out here, lenders are requiring appraisers to use sales comps no more than 3 months old (distressed or not) and to provide 3 listing comparables (distressed or not) as well.
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Old 09-14-2008, 05:36 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,596,336 times
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once again, you can NOT use a foreclosed or short-sale as a comparable in an appraisal. while there may be many distressed properties closed on, in the vegas region, they can not be use as comparable. what is driving the price down is the supply.
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Old 09-14-2008, 11:05 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,101,771 times
Reputation: 952
Quote:
Originally Posted by brokerdave View Post
once again, you can NOT use a foreclosed or short-sale as a comparable in an appraisal. while there may be many distressed properties closed on, in the vegas region, they can not be use as comparable. what is driving the price down is the supply.
When the only sales comparables in the last 6 months are distressed properties, there are no other comps to use. I truly wish what you said was true out here, but it is not regardless what you may think. The appraisal guidelines I mentioned in my previous post are what has been emailed to me by a number of lenders. Finding 3 sales comps that have sold in the last 3 months as well as 3 listing comps that are not distressed properties is virtually impossible.
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Old 09-15-2008, 02:33 AM
 
Location: Broward County
2,518 posts, read 9,700,322 times
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Its true though...ALL the homes I see are short sales. Those that are re-sales are still waaay overpriced because most of them bought at the peek of the boom and can't sell for less. So excess inventory = lower and lower prices. This real estate crisis is starting to get a whole lot uglier. Lehman brother just filed for bankruptcy too a couple of minutes ago.
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Old 09-15-2008, 07:02 AM
 
Location: OK
2,717 posts, read 6,297,109 times
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Quote:
Originally Posted by brokerdave View Post
once again, you can NOT use a foreclosed or short-sale as a comparable in an appraisal. while there may be many distressed properties closed on, in the vegas region, they can not be use as comparable. what is driving the price down is the supply.
Unless the Subject is a forclosure or short sale as well.
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Old 09-15-2008, 07:04 AM
 
Location: OK
2,717 posts, read 6,297,109 times
Reputation: 1844
Quote:
Originally Posted by Daddys///M3 View Post
When the only sales comparables in the last 6 months are distressed properties, there are no other comps to use. I truly wish what you said was true out here, but it is not regardless what you may think. The appraisal guidelines I mentioned in my previous post are what has been emailed to me by a number of lenders. Finding 3 sales comps that have sold in the last 3 months as well as 3 listing comps that are not distressed properties is virtually impossible.
Is the Subject a non-distressed sale?
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Old 09-15-2008, 07:55 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,596,336 times
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Quote:
Originally Posted by heydade View Post
Its true though...ALL the homes I see are short sales. Those that are re-sales are still waaay overpriced because most of them bought at the peek of the boom and can't sell for less. So excess inventory = lower and lower prices. This real estate crisis is starting to get a whole lot uglier. Lehman brother just filed for bankruptcy too a couple of minutes ago.
we've all been waiting for it. its corporate bankruptcy. not really a big deal.
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