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They had a house in the same city we lived in back in Michigan. Is was a four-bedroom, 2 1/2 bath house in a popular subdivision. They paid $250,000 for it about eight years ago, when it was brand new.
When they moved to Kentucky for the husband's new job, they had to stop paying the mortgage on that house. They did put the house up for sale. This was in September. In January, their mortgage company finally decided to foreclose on them, and a notice to that effect was in the local paper.
They had received little interest in their house until the foreclosure notice appeared in the paper. All of a sudden, their house was hot property, and they were getting two showings per day. They received fifteen offers in a week's time.
The offers ranged from the laughable $75,000 to $145,000.
Since they owed almost the whole $250,000 on the house (having taken out a home equity loan a few years ago) they have to "short sale" their house. This means that the mortgage company had to approve any offer made in order to sell the house.
The mortgage company paid to have two estimates on the house's value. One company valued the house at $157,000. The other company placed a value of $129,000 on the house.
Their realtor submitted the offer of $145,000 (which was the highest offer received.) The mortgage company hemmed and hawed, and finally, after a month of waiting, they declined the offer. The reason: The mortgage company said that the house was worth at least $153,000 and that was the lowest offer they'd take.
Meanwhile, the couple who presented the offer rescinded it because the short sale process was taking too long.
Our friends are now left with their next-highest offer, which was something like $125,000.
This for a house that they paid $250,000 for just a few years ago.
There is a silver lining in their cloud, though. Unlike us, our friends just stopped paying their Michigan mortgage. This means that they have no mortgage payment, no gas bill, no water bill, and no electric bill to pay on their old house.
And they were lucky enough to find somebody willing to sell them a farm down here in Kentucky despite having lousy credit and no money for a down payment. So they are living on a farm today, and we are stuck in a rental house in town.
Maybe Brian and I are doing it wrong.