Profile picture for unwirklich

How to figure out how much is owed and does it matter?

I'm looking at a home that I like.. that I believe is overpriced so much so we are planning to offer 75% of the list price, however from public information I found out:

Purchased  09/2003 and the mortgage amount was: $125, 507 down was 3.5% so they paid roughly 130K)
BUT.. then there are all these subsequent mortgages I assume are refinances maybe? Same owners...
03/05: $47,495
08/07: $199,599
01/08 $202,152
01/09 $205,184
They are asking 214,500 we want to offer 160,000 but are worried they may actually owe more than that. What do all these other mortgages mean? Do they matter? Or can we say.. you paid 130K in 2003 the market in our area has actually gotten worse not better so 160K is a good offer.
  • January 20 2011 - Kenai
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Answers (9)

Many sellers are having to write checks at closing to make up for taking out too many mortgages when the market was hot. If they want to sell it, they will have to sell for fare market value. Otherwise they could look into doing a shortsale. But none of that is your worry. Focus on what comparibles are selling for and go from there.  Wish you the best!

  • April 29 2011
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Profile picture for Connie Klemme
I wouldn't assume the hesitation to be fear or other emotion or reluctance, just experience on the liklihood of it being accepted.  So make the offer and if it gets accepted..then wow! great job, but if not  and if it's overpriced, there's likely other homes waiting for you. The facts about why you made your offer really aren't relevant.  The terms of the sale are relevant the seller iisn't concerned about what you like and don't like, they care about what you are willing to pay and what you're asking them to do (fix things or just as is).   Even if they owe more than it's worth, it seems like they'd lower the price a lot before they'd take an offer with that big of a gap. -but best of luck to you!
  • January 21 2011
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Profile picture for Connie Klemme

The amount mortgaged doesn't mean it is what they paid.  there could have been a big down payment, an owner carry of a second mortgage or a HUGE repair bill done.  So in addition to amount owed not equalling value, it also doesn't equal amount paid. You also asked..can't they take less than what is owed on it, not without the bank approving a short sale or them coming to closing with cash for the difference.   

  • January 21 2011
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Profile picture for unwirklich
Interesting. I looked it up and Alaska's inflation rate is actually been mostly under 3 (2.51% atm) since 1990.. minus a few spikes where it jumped to 6 once and 4 another time. Makes me even more confident 160K is a fair offer. Let's hope the seller thinks so too... my plan was to attach an offer letter sort of explaining how we arrived at 160K (which also happens to be our max approval amount so there isn't any room for negotiation.)..is that a good idea or bad? I thought it would help prevent the seller from just getting insulted if they saw the facts it was based on.
  • January 20 2011
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Your agent can provide you with the information you are looking for.  The listing agent should be open to disclosing that information in hopes of receiving a sufficiant offer. 
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  • January 20 2011
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Look in Zestimate for the property's value and also try the followed link which may help.

http://www.homesand.net/A ... ator.aspx

I figure that if the home inflation rate in your area is 3% annually then that home value is about $161,000.
  • January 20 2011
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Profile picture for unwirklich
I realize its irrelevant to value.. but can't an owner not take less than is owed?

We are working with a Realtor yes, she's a bit.. hesitant of making low ball offers it seems though whether we present reasons for the low offer on our own or not...She is far less helpful when we aren't thinking 95% of list or above is fair..I'd switch if she hadn't showed us numerous houses now as it indicates to me shes more worried about her commission than finding us a good deal. However she has invested a great deal of time in showing for us and I'm not in the habit of screwing folks over.

Thanks for your advice :)
  • January 20 2011
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Profile picture for nwhome.us
What someone owes on a property is irrelevant in determining its value.  It does indicate whether it is a distressed property or not.  You'll never know what someone owes unless the property ends up as a short sale, is foreclosed upon or is part of a bankruptcy sale.
Focus on what you think the property is worth, not what the seller thinks it is worth.
  • January 20 2011
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Profile picture for Sharon Lewis
Hi there, I think what you are looking at is public records. You won't know what they owe, what all that could mean is simply they were paying off, or borrowing a little or refinancing....Please tell me you are working with a Realtor? A realtor will do a comparable market analysis to see how the home measures up as far as value. Hopefully this is not a For Sale By Owner which can get a bit wonky and please use a Title company and a lawyer...cutting corners to purchase a home can cost you in the long run. Good luck to you, thats wonderful that you are going to buy a home.
  • January 20 2011
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