If you are looking to get a good deal on a used trailer that is in foreclosure, you just may be in luck. This could be the best time to buy. Prices are currently down and so are interest rates . Economic down turn in late 2008 and early 2009 have forced many homes and RV trailers to be foreclosed on.
What Causes Trailers to be Foreclosed On?
Recreational trailers have often been viewed as a nonessential item. This is why you typically pay a higher interest rate on a trailer than on a home. It is more risky to the lender than lending on a home, because motor homes are mobile, non essential, and a depreciating asset. When people in economic trouble are forced to choose between making the mortgage, the car payment or the RV, more often than not, it is the RV that is the first to get skipped. It makes a lot of sense then that RV foreclosure is increasing faster than home foreclosure.
Trailer RV payments can be pretty steep. I have had some friends who have recently bought a trailer and have higher payments on it than their house. Trailer payments are made back over a shorter period of time than a mortgage, typically 5 to 10 years. Most buyers are required to put down a large down payment. A new trailer however, can loose 40% of its value in the first year. As a result, a lot of people are upside down by quite a bit even when they are making all their payments. Being upside down can make it difficult to sell a trailer, because the lein has to be paid off before the title can be transferred to a new owner.
Avoiding RV Foreclosure
To sell a trailer that is upside down, you must do one of three things. These are listed in order of what works best: one sell it for what you can get for it, use your cash on hand to pay off the difference. Two, sell it and get an unsecured line of credit from a bank, friend or family member to make the difference, pay it back as soon as you can. Three, tell the bank you are selling it to avoid foreclosure, see if they will agree to take less on the trailer than is owed, so that you can sell it quickly and be off the hook.
RV Trailers Vs Other Types of Foreclosure
Foreclosed trailers and repossessed RVs are very different from foreclosed homes. Most of the time, RVs are in very decent condition, they are rarely used and can be a great buy. Although banks sell the trailer in as in condition, they usually allow you to inspect the trailer before you buy it. Not all trailers however, are in great condition. We suggest that you avoid buying a trailer that has been lived in for long periods of time. The easiest way to tell this is buy looking at the generator hours. Also looking for smells and worn out upholstery is another good indicator.
How Much to Pay for a Foreclosed Trailer?
A lot depends on the condition of the trailer and the NADA or Blue book value when you are buying from a bank. Banks will often take 80 percent or less of what they are asking. Often their starting asking prices on foreclosed trailers for sale, will be low book minus repairs. It is also a good idea, when possible, to tally up a list of repairs and show them to the bank as a way to get them to take less for it. When buying them from the owner , figure out a way to convince them how much it is costing them to not sell their trailer. Work out a deal that helps both of you, and you can both be happy, you getting a great deal and them avoiding foreclosure on their trailer
* Learn about Gooseneck Trailers
* More about RV Foreclosure
* Learn About RV repos and RV Auctions