RV Foreclosures
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. Motor homes 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 motor home or rv than you are in luck. The current economic
ressession has used motorhmome prices to an all time low. People are
having trouble selling motorhomes that can't afford and the back is
having to drop prices on foreclosed motor home 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. I have already
found several like this that are out there. This makes now one of the
hottests time to buy.
Why do RVs get foreclosed on?
Recreational vehicle 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 and 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 motor home payment most people
pay the motor home last. Be aware that trailers in pre-foreclosure my
require bringing back payments dues particularly if they believe they
have equity in the RV. Most of the time how ever you can short sell
and get them to take less on it then 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 then 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.
How to Avoid RV Foreclosure and repossession
To sell a motor home you are upside down in you must do on of 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 make of 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 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 motor home use it
less than 3 weeks a year. The average owner only puts about 5,000
miles on their motor home each year. Although banks sell most of the
RV trailers in 'as is' condition, they still (typically) allow you to
inspect the motor home 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 matainence information on the
vehicle.