Question -- Reassurances Needed HELP!
Hello Everyone,
My short term goal is to wholesale right now. I have an appt to view a house tmw that is in foreclosure. I know what the last mtg amt was and an approx of what the fmv is. I will see tmw what condition the house is in. When the seller called I had just gotten in the house with kids screaming, so my mind was not all there. Are there any particular questions that I should ask the seller tomorrow. This is my second potention deal (the first one fell through).
Mandatory questions are:
How many months is the house behind?How much are you needing to walk away?
Are there other liens on the property?
Sorry, I know this is basic. I just feel fear taking over. What I know so far is that he is looking for cash.
Add to your list:
When is the foreclosure date?
Also, the answers to these questions will help you START to analyze if this is a deal or not. Whatever the answers are, you MUST do your own due diligence--do NOT accept the seller's answers as truth.
Bring with you an Authorization for Information to be signed by the seller to allow you to contact the bank and get hard numbers on back payments, payout, reinstatement terms, etc.
Get to the county courthouse and find out about liens yourself.
Not to put too fine a point on it, but you can't trust what your seller is going to tell you--either through misdirection, lies or simply ignorance, you can't base your buy decision on his information--you MUST verify this all yourself.
Andy
db:
Not knowing your county website, I don't know for sure if it is suitable. In my county here in IL, the Recorder's Office is responsible for recording deeds, liens, etc. If you can get this info online, then yes, this is what you need to look at.
Warning: depending on the size of your county, you have to be careful about online recorded documents. For example, in Cook County near me, they are inundated with documents to record. It may be possible that some lien is sitting in a pile and is not recorded that could cloud the title later.
Three things that can help you here:
a) going to the courthouse (to the appropriate department) and doing the search there, or
b) have a competent atttorney or title company do the title search for you
c) do item b) and buy title insurance as well.
As far as repair value, you could hire a contractor to walk through the house with you and help estimate repair costs. If not a contractor, then you could find a home inspector that sometimes will offer their OPINION of repair costs in the course of their inspection (but you'll have to determine this before you hire them).
As to bringing the P&S agreement with you: I suppose you could do this, IF you had a good idea of what your deal is going to look like number-wise and if you have contingencies in your contract for things like inspection, clear title, verification of actual loan amounts, etc.
If the point of wholesaling is to buy a property below market value and sell it to an investor/rehabber (who'll want to make money on it as well), then you'd better have a nice, tidy package to present to your investor/buyer lest you end up stuck with that property.
Here's my personal opinion, in no way meant to be disrespectful: If you are not prepared to put together a whole buy package for an investor/buyer (including purchase price, repair estimate, their profit margin, etc.), then you may not be ready to wholesale.
You could try bird-dogging a few deals (just find the deals and get another investor to do them--for a fee) and learn from them about their repair estimating procedure (or learn about it on your own) before going out on your own.
I'm certainly no expert--just my .02 (and maybe worth every penny
Andy
don't worry about the questions. you already know what to ask. it's as you've have said " i just feel fear taking over". relax, be calm, you are this guys last hope of some kind of answer. you know more about realestate than he will ever know. thats why he in this position. if you go to him confident in what your doing he will listen to you. so don't worry. you are in control.....kenmax
p.s. write your questions down on a legal pad. your attny. does when he ask you questions. its a good why to cover everything you need to know and it looks professional and keeps you in control of the deal...km[ Edited by kenmax on Date 08/18/2004 ]