Preforeclosure Help!!
Ok, Saw in the paper property is going into foreclosure, I plan on going to the town hall to do my homework tommorrow. My question is this, If the auction is Nov. 4th, can i Make an offer prior to the auction?
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"Luck, is when preperation meets opportunity."[ Edited by Birddog1 on Date 10/27/2003 ]
Make an offer to who? It is a little late to prepare the info for a short sale. However, you still have time to broker a deal with the current owner. The more info you have will dictate which route you should take. Good luck.
Matt
So, Basically now is a good time to attempt to contact the owner and buy the property off them, to spare them the foreclosure?
If the numbers look right, now is the best time to go in and make the offer. I have found that way too many deals are lost when an investor goes in as soon as the 1st notice gets filed. The investor makes an offer at a time when 99% of the property owners know for sure that they will get out of the situation one way or the other. I like to keep my eyes open, even when my offer has been rejected, until the very last day. The closer you get to the sale date, the closer you are to striking a deal. No it is not too late!! Ask the owner to contact the finance company or to give you POA to deal with the bank directly. It is up to the finance company if they want to delay the sale. If the numbers look right for the bank they will deal with you. If worst comes to worst and they do not want to deal with you, if the numbers are right, you could deal with the owner direct up to the last day.
Good luck
Repoman
I'd rather deal directly with the owner. So basically, I can just go in, and offer them cash for the house. How can I go ahead find out what they own, not backtaxes or anything, just to find out how much equity is in the property? would i have to go to the lender for that?
[addsig]
If you are going to go in and deal with the owner directly, just ask him/her. If you want an exact payoff and it is one week before the sale. Ask the owner for the name and phone number of the attorney for finance company. The attorneys name and number could also be found at the courthouse. Although I usually get this info when I call, they may ask you for a POA which you can obtain from the seller. You will need to get a payoff for the property and a payoff for the attorney fees. By the way.....I would not "just go in with cash" without checking with the tax collector and finding out what is delinquent on taxes. You also need to check for additional liens at the courthouse. (title search). I will usually show up and have one of many title searchers look up the property and do a quick search for additional liens!!! Do your homework or you will get burned!!
Repoman
I would do a pre-title search. It may take 2-3 days, but you will know exactly what is owed on the property. Back taxes, water bill and all. You don't want to go to close and find out you have to give the seller money to payoff a $1000.00 water bill or something.
2-3 days is way over exaggerated..
It takes an hour or less to do a title search.. Your ONLY concerned with liens that are "recorded" at the recorders office up until the time of transferring of title/deed.. A title search takes me 2 mins to do, and another 5 mins to print anything I find should I find any liens..
As for back taxes, of course you must see the tax office (NOT the assessors).
And on the topic of equity or payoff amt of existing loan on properties, you need to speak directly with the lender yourself, but prior TO this you can GUESTIMATE the remainder due on loans, by looking at the mortgage (which IS recorded at the recorders office). This mortgage/trust deed will tell you the date the loan was taken out and the amount of the loan.. It only takes a little common sense to guess an approximate amount of equity/paydown which has occured on the loan.. I.E. an loan that is less than 3 years old doesn't even have 5% equity in the loan..
My little guestimate system as I call it works well for me.. Before I ever speak with owners I obviously know if there is big dollar signs in the deal or if it's a very marginal deal, and if marginal obviously I want and need exact figures from the owners lender.. But before you even approach an owner, YOu should know all this info and have driven by and/or walked around the property and KNOW if you want to buy it and think you can make some money on that property, either up-front or on the back-end.
Chris
ok guys...
Got the tax info. 718.36 behind.. no big deal. Assessed Value, $166,400, Trying 2 get a pay off or amount of equity in the propery before i go to the buyer..can't find it. House next door, basically the same house, sold, 275k. Auction is november 10th.. what do you think?
[addsig]
When you say recorders office? do you mean the town hall, or do you mean the county offices?
[addsig]
cky...could you possibly share with me how you do your title searches in such a short time...this has been a thorn in my side forever!...with my title company I am waiting 3-5 days!!!...I would love to be able to do it myself in under 10 minutes...
thanks for your help...
I have the same problem.
I have never really done anything with foreclosures before. I purchased one but it was just conventional, through a lenders real estate agent, nothing fancy.
I have a deal that has fallen into my lap. The house is located in Utah, were the market is flat but I really think it's poised for rebound. A homeowner came to me inquiring about a home of mine that I rehabbed. She is 4 or 5 months behind on payments because here husband lost his job. She's owned the house for four years so there is not a ton of equity, and like I said the market is slow. She owes about 140k the house is probably worth maybe 150k.
Because the market is slow I was thinking about approaching the lender with a 120k offer, because I'm certain they don't want to put it on the market right now. Do you think that is crazy, should I ask the lender to finance me for a higher loan with lower interest?
What is the best move here? The homeowner says she can prove she and her husband are working again and I was considering renting the house back to her (rent-to-own). Obviously I would need some equity in the home to protect myself. Please advise.
Birddog1,
I recently dealt directly with the seller on a pre-foreclosure. Her information was totally unreliable. In fact I helped her into bankruptcy since I was introduced to her 2 days before the sale.
She wanted a fixed amount of cash out. There were liens everywhere--garbage collection, back RE taxes... and two mortgages. It was difficult to establish what was owed since the interest and penalties were accumulating. I had people at a title company and a loan brokerage working on this. Her bankruptcy attorney finally told me to make a fixed price offer which I did. When we were ready to close the bankruptcy was lifted and we closed.
The caution is that the current amount owed may be significantly different from amounts recorded as liens.
Good luck with this.
Ed
piercejd,
You may be cautioned by others about selling back to the seller. An issue arises when A buys a house from B at a discount and then allows B to purchase back at a a much higher price, usually through an option. The issue is usury law that limits the interest rate on a loan (lending institutions have exemptions). The concern is that A will get sued. The suit claims that the entire transaction was a usurious loan. There are severe penalties. Here in CA the penalty is 3 times the amount gained.
Your situation sounds a bit different since you are buying from the foreclosing lender. You might want to run this by an attorney.
My foreclosure mentioned in my previous post to Birddog1 also warrants some caution. I was supposed to rent back to her and she wouldn't pay rent. I filed and won an unlawful detainer. Before the law suit she agreed to cooperate with real estate agents so I could sell the house. Three RE agents were actually inside the house so there is plenty of evidence that my intent was to sell to a third party. Meanwhile , she found someone who could help her husband buy the property back since he supposedly had not been in bankruptcy (this was false). If I sell back to them do I have a usury problem? They certainly were not enticed by me that I would sell back. In fact, my eviction attorney (a real estate specialist) drew up an agreement so they can pay me for occupying the property until February when they think they can qualify for a first time buyer's loan.
I am still going to get additional legal counsel before selling back to them. You might consider this as well for your transaction. My sense is that we are both on safe ground , but there are too many attorneys out there that hallucinate on new ways to stretch legal concepts to favor their clients.
Regards,
Ed
edmeyer,
Thanks, I didn't even consider that.