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Old 08-13-2015, 05:33 PM   #3
Travis Munroe
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Join Date: Feb 2009
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Not a stupid question - it is quite common!

Judicial can mean several things however it is often that the owners have equity in the property and it would not be fair for the bank to determine the value as the bank simply wants their money back.
If 500k is owed and the place is worth 600k, the bank is happy to list it for 500k and the owners walk away with nothing.
The courts won't accept such a offer based on the listing Realtors evaluation/Appraisers evaluation.
That said, it can easily run 50k in expenses for legal fees, commissions, management fees of the property, etc so owing 500k and having the courts accept a 560k offer leaves very little left over.
Keep in mind, there are numerous reasons why it can get into the courts hands and above is just 1 example which is not overly common as most foreclosures result in little to no equity. Even if your selling price is equal to what is owed, I am unable to list it on the market as there is no equity to pay commissions. A solution is to have the owner pay out of pocket or put money in trust however the chances of someone in such a situation having the free cash are rare.
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