Approaching Homeowner Before House Auction
Has anyone tried to buy a house before the foreclosure auction directly from the owner? We are interested in a home, that is being foreclosed, however it is not for sale. We wanted to potentially speak to the owners before the foreclosure to potentially save then from ending up with bad credit. The auction is in 21 days.
Smitty
I have and have done it. It depends on whether the people are realistic about what is happening. Often they say that got it under control or will file bankruptcy. If you want to help them you often have to help them find a place to move to if you buy the place.
How much do you care about their personal situation? Do you want to help them or do you want the property? I find that most people in the foreclosure situation have unrealistic ideas about how their situation will magically change. I have heard everything from individuals proclaiming recently purchased lottery tickets to be the solution... to praying about it. I find that the best thing you can do is to educate the individual as much as possible. Your true intentions are always known on some level, so if it is just for profit then understand that it is a numbers game. Get as many deals on the table as you can. someone will bite. It takes much more than 1 seed to grow a crop.
You need to have a title search done before you even consider bidding at the auction. You can proabaly look at public records yourself to determine what is owed. It might be much more than just the mortgage. And remember, there is the principle balance, missed payments, late fee, foreclosure fees, etc.
In Florida, I am not seeing anyone with equity these days. Anyone that purchased, refinanced, or got a HELOC in the last three years has no equity.
If you want to find the people, pay for a skip trace. CAll them and ask if they want to sell the house. Get a payoff amount on all liens on the property. Also get a reinstatement amount on the mortgage(s). If you run out of time, get an experience real estate attorney to file a motion with the judge. Go to a realtor and have a closing.
Bargain,
Any clue as to the logic behind this?
They certainly sell them cheaply enough once they own them- here at least.
Chris
Not really informed about PMI, as I avoid it, but is there possibly some connection? I know most of these sub prime mortgages required PMI- is it possible the bank only collects when they make every effort to obtain as much as possible for the property; i.e. sell it themselves?
Seems like there must be some logic to it!
Chris
"Chris, my CPA thinks the banks are waiting to see what the Government is going to do to bail them out of this mess."
Ah, of course- the government interfering with free enterprise again. It would be one thing if they would take all those taxes they charge me and help the poor, but when they give them to the rich and mess with my business at the same time frankly it pisses me off!
Chris
is it far enough away from your primary residence to call it a 2nd home?
Generally, only the home you pledge as collateral can be foreclosed upon, but there are such things as deficiency judgement.
Would your primary residence sell faster?
Have you tried network with the 1st time home buy and down payment assistance programs?
Seller carry back?
The home is 2 miles away from my primary residence. And I would rather not go from 3500 square feet with a pool back to 1200 square feet with four acres to mow!!!!! It was purchased after a divorce (all I could afford) and when i remarried, we relocated to our home now.
All the other suggestions...I will have to check up on. Thanks VERY much for the info. I hate renters!!!!!!!!!!