Everyday there are more homes advertised as "Pre-Foreclosure" bargains! These are generally situations where sellers are trying to get a purchase offer that covers all or most of the amount that they owe the banks on their property liens. And they're trying to make this happen before the banks initiate the foreclosure process.
I recently participated in the "short sale" of a home in MetroWest Orlando. The buyer made an offer of $150,000 on a property that had mortgages totalling around $210,000. I presented the offers to the two banks for their responses.
The first bank held an FHA loan that required complete payoff - which was $123,000. The second bank said they would accept 25% of what they were owed, which with closing costs made a purchase offer of $157,000 necessary.
The buyer added $7000 to his original offer, and closed on the property last week! He has immediate equity in the home as the comparables are selling at no less than $200,000 and the appraisal came in at $210,000!!
The seller was happy as he avoided a foreclosure on his credit record!
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