If you are looking for RV foreclosures to buy, you can purchase them one of three ways.
The first way is to find RVs that are in pre-foreclosure. This means that the owner is selling to avoid foreclosure. There are actually a lot of these RVs out there. Probably 1 in 10 owners selling an RV for sale is in a lot of financial trouble, and a lot of them are selling because they can’t afford their payments. In order to find these sellers, you just need to talk to a lot of sellers. You need to find out as much about the seller as you do about the RV. Most importantly, you need to find out why they are selling. If they’re selling to avoid foreclosure, then you might be able to get a really good deal.
The second way to find RV foreclosures is to buy them directly from the bank. You will probably have more success with credit unions than you will with banks.The reason why is because they are smaller and they’re usually easier to deal with. Most credit unions will not have a lot of RV foreclosures (RV repos) on hand. You may only find one or two for every four or five credit unions that you call. However, it is definitely worth it, because finding these RVs will allow you to save a lot of money, often as much as 40% to 50% off of the retail price, or 20% to 25% less than the private party price. Keep track of the credit unions you call and if they don’t have any available right then, ask if you can call back later and check again.
The third way to find RV foreclosures is to go to an RV auction. The RV auction may be combined with a car auction for an estate auction, or it may be just focused on RVs. If it is focused solely on RVs, it will be a great opportunity for you to find a lot of discount RVs in one location. Most RV auctions are open to the public and anyone can go and bid. A certified check or a money order is the prefered method of payment at an RV auction, because it is safer than bringing cash. (Find out more about RV auctions and how they work.)
Why do RVs Get Foreclosed On?
Recreational vehicles are viewed as luxury. They carry high interest rates than most home mortgages for 3 reasons. One, they are a depreciating asset. Your home may go up in value, but your motorhome will not. Two, they are mobile. Sometimes lenders have trouble finding them when a balance is owed. And 3, if you have to choose between a mortgage, a car payment, or a motorhome payment, most people pay the motorhome last. Be aware that trailers in pre-foreclosure my require bringing back payment dues particularly if they believe they have equity in the RV. Most of the time however, you can short sell and get them to take less on it than they are owed.
The truth is RV payments can be high, particularly because they are on shorter notes than real estate notes, and they have a higher interest rate. On a $40,000 motorhome, payment of $700 a month are not uncommon. This is higher than a lot of mortgages! Plus most RVs lose 30-40% of their value in the first years. This causes a lot of people to be upside down on their equity. If they are having trouble making the payments, they will also have a lot of trouble selling it. The result in some cases is almost certain foreclosure.
RV Foreclosure History
During the late 90s RV foreclosures were rarer and real estate prices were rapidly escalating. This was in part due to rapidly escalating prices in real estate and the growing demand for recreation. During this period of time, a lot of new manufactures entered the business. Motorhomes were manufactured in every price range and for every segment of the market segment. Many retired baby boomers purchased these units as a convenient way to provide a hotel, vehicle, restaurant, and a kitchen under one convenient roof. Much like the auto industry supply outpaced demand and in 2007 and 2008 dealers have had to cut margins drastically to keep from going out of business.
The good news is that if you are looking to buy now and get a get deal on a foreclosed motorhome or RV, then you are in luck. The current economic rescession has used motorhome prices to an all-time low. People are having trouble selling motorhomes that they can’t afford and the back is having to drop prices on foreclosed motorhome by a lot more, even to be competitive. In addition, interest rates are also at an all-time low and the number of foreclosures is going up. Pre-foreclosure is also a hot market. because it is hard to find a buyer for RVs in this market, many owners will want to settle for 20-30k below book value. I have already found several like this that are out there. This makes now one of the best times to buy.
How to Avoid RV Foreclosure and Repossession
To sell a motorhome you are upside down in, you must do the following.
1. As soon as you can, sell it for whatever you can get for it, (the moment you sell it, it stops depreciating and so do your payments) use your cash on hand to make up the difference.
2. Sell it and get an unsecured line of credit from a bank, friend or family member to pay off the difference, pay it back as soon as you can. You can get the unsecured line on something you own, like a house (home equity) or a car. We suggest something short term, the quicker you pay it off, the quicker you can move on with your life.
3. Arrange a short sale with the lender. Explain to the bank that they are going to loose some money because you will get foreclosed on if they can’t help you sell it. Some may be willing to lower a pay off amount to help you find a buyer. while others may want you to bring them an offer before they will even consider a short sale. When the bank agrees to take less, you have sold your RV. Some lenders may come after you for the difference but this is something you can work through later.
Don’t be scared of buying a repossessed RV
Most foreclosed RVs are actually in very good condition. (Especially the newer ones!) Statistically 1/3 of people who own a motorhome use it less than 3 weeks a year. The average owner only puts about 5,000 miles on their motorhome each year. Although banks sell most of the RV trailers in ‘as is’ condition, they still (typically) allow you to inspect the motorhome before you buy it. A good indicator of use is the mileage, the upholstery and the generator hours. It is also a good idea to look at any available maitenance information on the vehicle.
Here are some related Articles:
* 3 Ways to Find RV Auctions
* Finding Cheap Motorhomes and Cheap RVs
* RV Foreclosures Guide
* What is the Difference Between a Gas vs Diesel RV or Motorhome?