Anyone buying "short sell" properties and (trying to) resell them?

My real estate broker/partner has a hot deal, or so he says.

Property with a $200+K mortgage, recently appraised at $180K, going into default. He believes I can pick up the property for $45K, he believes he can sell it quickly for $125K to $145K.

I've never messed around with short sales, sheriff sales, foreclosure sales, etc. But I question the ability to flip the property quickly, even below market, in this economy. Anyone doing this now and any downsides to it other than potentially sitting on the property for several months?

Just bought a house last week. Personally, I don't see a realistic possibility of selling quickly though. There's nothing on the horizon that makes me believe that home prices or lending will cause prices to take any substantial rise in the next 6 months to a year. I've probably passed on two dozen before I bought this one. Lots of factors.

Most "Short Sells" take some time as the banks really drag there feet . Expect 3 weeks to a month or more before you even find out if they accept your offer . At least that is the way its been on the West Coast .Good Luck . We are seeing lower priced properties beginning to move out here .

I bought my ranch at auction and its a excellent way to get a great deal ,but you have to put a non-refundable 10% cash down and the remainer in 10 days if you bid . Usually not enough time for most folks to set up finacing . That stops a lot of bidders right there .

Not to say it's not possible but..... I have a hard time believeing that the bank will take 45 on a 200 obligation. The other problem is that lenders aren't turning these things (short sale offers) around quickly assuming that the offer is accepted.

Whether or not your RE guy can turn it fast is relative to the market it/you are in. How well do you know that market. Here where I'm at things are fairly stable and it's still hard to get folks to part with thier $. I've been to a few auctions where things sold that way. There was a little corner property (commercial) down the road from me. Former auto repair shop w/ 3 bays and an office. Fella had it for sale for 175, gavel dropped at 47.

Do you have to do anything to the house? Gonna rent it out for a while? If it can be had for 45, why hasn't anyone else come along and snapped it up.

Just the kind of stuff that goes thru my head.

We sold our first home in 2002 for $79,000. At the time, it was appraised at $85,000.

Somewhere between the time we sold it but before the real estate market collapsed, the new owners either refinanced or took on a second mortgage. Obviously, the bank appraised it for more at that time, because they owed $100,000 when it went back on the market a few months ago.

They first listed it with a realtor for $112,500 to cover the realtor's commission and the amount they owed on the house. However, since we sold it and since their last appraisal, the neighborhood has significantly declined and the real estate values collapsed.

After no success, and because they couldn't hang on much longer, the bank agreed to a short sale. It ended up selling for $58,000. While it was $21,000 less than we sold it for seven years ago, I wouldn't pay that much for it now because the change in the neighborhood.
I think that is probably the situation on a lot of short sale properties; they are being offered for much less than they originally sold for, but real estate prices may have been inflated at they time they sold last so they really are as great a deal as one would think after investigating further and asking questions.

It may have been a good deal a few years ago, but the market has changed a lot and may not be as good of a deal as seems.

Granny used to tell me "If it sounds to good to be true, it is"

waybomb said:

Granny used to tell me "If it sounds to good to be true, it is"

Click to expand...

Mom and Dad use to tell me the same thing .