Title Company Help
Through some past networking I was able to come across a inside contact in a title company. What information should I be trying to obtain from them. I was thinking of any preflorclosure or REO information list/contacts and any title search deals i can get. Any suggestions?
yes calling and asking the bank or the listing agent to see if there stories are the same would be a good idea.
weather the bank can profit or not depends on a few things. you should check your foreclosure laws in your state. here in Connecticut the bank can take a property back through strict foreclosure with no sale, and then resell with a realtor at full market. everystate is different.
doesnt make sense that all the units are in foreclosure, is it condos? usually a condo association is formed and the condo owners own the property as a whole. you need to do more research on the whole situation.
Maybe the reason why the property in question is listed in MLS at a higher price is because the local townhouse community does not want to see there statistics to be skewed buy such a low sale.
HTH
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often, when there is a low price like that listed on a foreclosure site it is because the mortage in second position is the one foreclosing (or both the 1st and 2nd are foreclosing). I attended an auction last week where two different auctioneers had the same property....one had opening bid at 144k and the other had the bid at 38k. They both got postponed...presumably because of the issues between 1st and 2nd mortages.
Overall it pays to be very cautious with foreclosure ammounts that seem very low..they usually indicate that something is afoot. And remember, even if you get the property through the lender in second position, the first position lender still has a claim on the title and you could get stuck paying the 1st as well as any arrears. Yikes!
I would be very hestitant to buy something in a complex "where everything goes to foreclosure". That one realtor can have his property listed for two million if he wants, but what have things SOLD for? Look at your solds comparables very carefully before investing in this complex.
Thanks for the response. Greatly appreciated.
How have you found out it is worth less than you paid. You said it appraised and that is legally how you determine what the worth is.
What kind of undisclosed problems?
melj is correct. anyone can ask any price for there property and if some one comes along willing to pay it, then thats that.
yes in some states a disclosure form is required or could result in the realtor or previous owners getting fined.
the only thing i can see being wrong is that the appraiser didnt do a truthful job, in which case you would have to go after the appraisal co. which is usually part of some state organization and from what i hear that is not an easy thing to do. even when the appraisers are infolved in scam operations i hear its not easy to get anything out of going after them accept alot of lawyer costs.
talk to an attorney about it.
Since we moved in we discovered a huge deflection in the flooring by the fireplace and several other "soft" spots in the living room and we had to replace 15 tiles in the kitchen because they were loose (popping up), luckly we knew who installed the new flooring (they had remodeled only months prior) and he repaired the job, but noted it was hard to get the floor "level" whatever that means, and that was about a month ago and more tiles are popping up! As for how I know it is 50K, well I have since seen two homes of similar age, size and style sell and it was for far below what I paid. The homes the appraisor used to compare were much larger but about the same age. One of them actually belongs to a friend of mine now and it is definately NOT a comp. I appreciate all your comments and advice....
yeah seems like either an incompetent appraiser or a case were he was told he better get it in at the loan amount. yeah your right in most cases an appraiser will try to get the appraisel in at the laon amount but if there is a huge diffrence they should know better. i guess thats why you should always have an independent appraisal done especially if you dont know the market.
i would contact a competent real estate attorney who can let you know your recourse against the appraiser.
thats if you set on trying to get something out of it. put it may be a lost cause.
I think the problem with the floors is they need more nails that hit the supports. Many times when the carpenters use a nail gun, they miss as many supports as they hit. Also, if the floors are built 24 inches on center, they do flex a lot. Sounds pretty normal.
You are wise to inquie about this. In many states, courts have ruled that buying a home from someone in foreclosure and then renting/leasing back is simly a vailed consumer loan and thus, comds under the appropriate loan laws. This is a sticky wicket and graduating that to a family member, in my humble opinion, will only solidify it further and cast more doubt on the actions. Courts will tens to hit you harder if they believe that you are aware of something and make attempts to circumvent the real issues.
If you buy the home from the party and then agree to lease/rent it back to them WITH a clause saying that there is no agreement to allow the seller to re-purchase at some ponit in the future, there generally is nothing that would be thought of as usurous inthat situation. Where people get into trouble is when they agree to re-sell the property to the same person in advance.
But, have a good attorney check out the case law in your state.
Properties ALWAYS sell at trustee sale. It just usually is bought buy the lender that had the note.
You can call immediately after teh sale. It depends on the bank as to how quick the chain of knowledge goes. The sooner, teh better.
Go for it! 22 is a perfect age to start, and to think you have a degree and a job lined up, with experience in rehabs. You have a leg up on many much older.
I purchased my first house in 1982 at the age of 22; my payment was $114 per month. At first I worried about that crushing debt; it seems silly now.
Start now, and when you reach my age, I know, it seems way into the future, you will be sitting pretty; even if you only buy one house per year.
I did well because I started early, not because I was creative or clever. In fact I am learning that people on this web site are doing things in real estate, that I only thought might be possible, but never tried.
there are many ways to make money in real estate, foreclosures are only one of them. it never ceases to amaze me that everyone relates foreclosures to "bargain" some are some are not. you could buy one multi fam a year and sit on them forever. all depends on your goals.
I myself am younger then you, and have done a number of deals. i have never ran into the problem of people not taking me seriously, especially people in foreclosure. usually they have more to worry about then age. although i do get some comments like "you look really young" i just smile and say "well thats better then looking really old" some times you just have to put people in there place if they think there tuff guys. remember your the one helping them, they should be grateful.
oh and when you get that job in finance let me know, im looking for some cash investors who wouldnt mind funding some of my deals. investment bankers, reits, old rich people. etc. for a nice little return on investment.
remember foreclosures arent the only way to make money in real estate. you want motivated sellers weather it be foreclosure or not. rehabbs are a great way to make money, especially if you have the backround. maybe start out doing one a year. or one durring the summer.
as far as envious goes, just dont pull up in your ferrari and you should be ok.[ Edited by ZinOrganization on Date 02/12/2005 ]
Imoapie, you are one of the few who has timing correct! With that said you are at the perfect age to begin this journey… Because you are young you have more of an edge on many other investors out there.
For one your brain operates at a faster pace!
You can AFFORD to take well thought-out risk!
And the list goes on and on and on…
Dude, I am in my early twenties myself and I regret that I didn’t start looking at this stuff in my teens!
I am thinking about starting a nationwide young investors group via the internet! Its time to retire these old folks along with their millions and take over!
imoapie - you will have to research your counties foreclosure laws. you should be able to do that on line by looking up state statutes. im more then sure that there are varius Investor clubs in the New Jersey area, do a google search or look in the group section of this website.
some counties have property information online but most dont. u may be able to pull some info up on it but to find out how much is owed you will have to go to the county recorders office and do a title search. if the property is in pre foreclosure and the bank has not taken it then you will have to track down the home owner and get it under contract. then either be able to close before the bank takes it or see if the banks willing to delay it while you get your financing together. if the property has already been foreclosed on and the bank owns it you will have to talk to the bank or the listing agent and negotiate a price.
vacant houses are great because you dont have to get the home owner out.
I starting investing at 18 in real estate. I am now 24. Own property in 4 states and am sitting well. One thing i have learned. You can learn a lot from mentors and they are all willing to teach if you ask. The one important thing to remember is the best learning lessons are the ones that you experience yourself. I am so glad that i have made the mistakes that i have in real estate at a young age while my capitial investments were small because now when i am moving on to make bigger deals happen i have a little knowledge under my belt.. Therefore making the deal more confident. Good luck...
Raheel, dont you mean upward. with rising interest rates and so many new homeowners buying with adjustable rate mortgages and no money down dont you think the foreclosure rate would go up, not down.
anyways the only trend i see is that alot of people are getting into buying foreclosures, like its the new big thing. a good investor will find deals in any market weather they be foreclosures or not.
I assume you are working with a title company to handle the transaction? If so, they should find any liens or judgements on the title in the preliminary title report. If they find something, they will issue the title policy with exceptions. It will be up to you and your seller to figure out who is paying off any liens or judgements, and which ones will stay. If you have bank financing, they will want to have a clear title before they fund, since they want to be first in line of liens on the property.
When you get title to the property, the seller will probably give you a Statutory Warranty deed. You can ask instead for a General Warranty deed, which makes the seller responsible for any title issues.
Basically what i want to know is if i get in contact with the owner and get them to agree to turn the house over to me what kind of contract do i use . ie a promisary note, a notary? or is there some way to have the title transferred to me once the balance is paid .(assuming i already have a separate deal worked out with the owner)
Preforclosures are extremely competitive and extremely risky. If you know what you are doing you can minimize some of the risk and sometimes you take calculated risk as part of the ability to profit. But as a one time investor/homeowner, you can not afford to take any risks with your 12k. Preforeclosures and auctions are also very competitive. If a first time investor was able to snag a deal, it would be either because of extreme good luck or because nobody else wanted the deal.
Brenda
Thanx for your honesty.
I would agree with Brenda. I definitely would not recommend risking your money, on the pre-foreclosure, with the amount of knowledge you have at this point.
Quote:
1st question. in a listing like this are they required to tell you all of the fees and Leins?
-> No, they are not required to tell you about all the Liens on the property. This, just talks about the foreclosing lien.
2nd , in this example they say $182,386.38 is due at the end of auction
is that what the auction bidding will start at ?
-> Yes, approximately. Could change right before auction.
3rd could you give a breif explaination of what risks this type of purchase might have.
thanx
-> That is where your learning comes one, each situation is different, and could have multiple risks.
hello,
i am a newby just like you and i have been doing some reaiding on forclosures. I would reccomend that u take the same route. I read Quick Cash in Forclosures & it is very informative for a beginner. forclosures can become very complicated so please be careful. P.S. you usually you dont get to see the internal of a house going for auction. you dont want your first primary home to have a super damage roof or any other major problems to drain your pockets
Thank you all for the great advice, Im gonna hold off for now until i learn alot more. I guess i was a little over enthused about the possibilities. Very glad i found this site though :-D
You have received some wonderful advice on this issue! Therefore, I will just add my 2¢.
You should first place your 12k in a CD/401k/IRA or any other interest bearing type investment plan that will allow you to get a loan using the amount saved as security. Many will lend based upon the security instrument at 2% above what your interest rate would be.
You first of all need to learn all you can about foreclosure investing before you jump, deals come and go and their will be others. I love the excitement in your post.
You first of all need to research the property at your tax office and deeds office.
You will want to look to see what position the foreclosing party is in 1st, 2nd, or 3rd as this will be your first determining factor for risk.
You will want to inspect the property to determine if any potential repairs my out weigh the investment.
You also will need to determine what the current market value of the subject property is by evaluating several recently sold comparables in likeness and location of your subject investment.
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I currently have the money in my credit union and they give me %2.69. I have just picked up the paperwork to apply for a loan from them. Would it still be better to put the Money in a CD or 401k? and if so what type of CD and for how long?
I currently have the money in my credit union and they give me %2.69. I have just picked up the paperwork to apply for a loan from them. Would it still be better to put the Money in a CD or 401k? and if so what type of CD and for how long?
Thanks! Owner now wants to talk. Next question. Mortgage is 365K. House has major cosmetic repairs needed. Great otherwise. I plan to offer 330K. Do banks ever accept less than mortgage?
Thanks for all the advice. Since the owners have filed for bankruptcy earlier this month and were given 30 days. Do I need to have the comps, estimates, etc. and the bank on board before the end of the 30 days? Or does the 30 days only end one clock and begin another? If so how long typically does one have after the 30 days are up?[ Edited by erinutah on Date 02/23/2005 ]
Thanks for all your expertise and advice. I go to see the house tomorrow - camera in hand.