Craigs list/ Foreclosure scams. (Many: short sale, foreclosures, renting)

[tmalle2]

I've noticed that every time I log onto Craigslist there are postings about renting/owning these great homes for almost no money. Gotta be a scam or a catch, right? Many of them are "pre-foreclosed" and send you to other web sites.

I would like to find out if anyone else has heard of this... or knows a family/individual who has recently taken over a foreclosed home. Are there benefits to doing so? This relates to a school project I'm doing and I need real people to interview. Please get back to me if anyone has information!!!

[bryan61]

I just bought a home in pre foreclosure and got a really good deal. In PFC your still dealing with the owner usually in a bad situation. My seller had nothing to do with the current market problems but was a family member they had co signed for and got left holding the bag. I got the house for what they owed and hung the closing costs on them. I also did not hire a buying realtor so the selling realtor was able to kick a little back to the sellers to make the deal happen. I dont think I would have gotten the deal had the sellers not been bleeding money making payments on this house. All those factors helped my get a really nice property. On the other hand ive taken a little bit of a hit on a couple of houses i was seeling back in the state I moved from so its balancing out.

Once a house goes into foreclosure I think you are dealing with the bank. Alot of time when its an REO the bank has to go in and do a trash out or fix it up so that can add to the price tag. The thing about banks is their asset department can decide to sell the house for less than the loan amount and take a loss. From what I understand this can take time and sometimes a bank will just sit on the file leaving the buyer in the dark waiting, months sometimes.

I think in a short sale the propety is still in pre foreclosure and the buyer and bank agree to take less than the loan amount for the house, im not sure.

Once a house is owned by a bank they may put it up for auction. Im not sure but it seems to me you have to show up at this auction with a MO or cashiers check for the amount you are willing to pay for the property and hope your max bid will take the home. In this case banks will send an agent to make a bid on the property making sure it sells for a certain amount.

I think for the average joe looking for a house if they are not in a hurry they can try to buy bank held foreclosures the problem is talking to the bank trustee, seller, realtor and all the other sharks involved looking for a piece of the pie. And alot of times listings arent accurate and finding these contacts can be problematic. I got a list of bank held fore closures a while back and half of them were sold many I couldnt find a contact for and when I did find a trustee they couldnt give me much info. You really have to know your way around and be patient to get this to work for you.

In my situation I saw the house I wanted in pre foreclosure. I told the selling realtor I couldnt get the money they were asking but I really like the house. He said make an offer if its below the balance of the loan we will run it through the bank and see if we can get them to take less. But he also said that if I make an offer at or just above the loan amount the seller could agree and it would go down just like a normal transaction. So I did some research in the county records found out what they paid for the house figured approximately what the balance would be. It was more than I thought I was approved for but when I went back to my broker we found that I had alot more room than we originaly thought and was approved for the amount to make the offer. The realtor got the seller to agree and I signed a PA. Like I say I dont think I robbed these people because when they bought the house in in 2004 they paid an inflated price in a bubble market. However they also did about $100,000 in upgrades over the last 3 years making it a really sweet deal overall in looking at comparables

Buying foreclosures, banked owned properties and at auction takes knowledge of the process and the market you are buying in. Its not easy to do but if you have time and a willingness to beat the bushes for trustees and the selling realtors that represent them you might be able to take advantage.

[tmalle2]

Thanks, Bryan. I sent you a message about this. Please get back to me when you read it.