I want to talk about a specific type of motivated property owner that you need to know about.
These are the ones who have upside-down properties.
Sounds a little funky, doesn’t it?
Of course, I’m not saying the property is physically upside-down. What this means is that the property’s equity position hasn’t gone in the direction it’s supposed to.
In other words, the house is in negative equity. This means that the value of the loan the owner has against it is higher than the value of the house.
Usually, this happens because the owner bought the house in a declining area. They’ve been making their payments, but the house has simply lost value to the point where it’s dropped below the loan value.
You know how you can feel stuck as a buyer because of the banks?
People with upside-down houses feel stuck as sellers.
They simply can’t sell their house through traditional means. That’s because they need to sell it for more than it’s worth so they can repay the bank.
That’s not going to happen. Buyers aren’t going to spend more than they need to on a house.
And so the seller ends up stuck in a property that they don’t want anymore.
Oh and by the way…
These sellers also can’t use a real estate agent’s services to help them. After all, most agents work on commission, based on a percentage of the selling price.
And since the house is already worth less than what the seller owes the bank, they definitely can’t afford to pay that commission.
You can help these people, while securing a property for yourself.
And again, it comes down to getting creative. In this scenario, you’d do what I call buying on terms.
If you follow my Facebook Page then you already know what that is.