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Old 06-13-2008, 10:59 PM
 
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What is the processed to buy Pre-Foreclosure home?
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Old 06-13-2008, 11:17 PM
 
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Quote:
Originally Posted by amb1s1 View Post
What is the processed to buy Pre-Foreclosure home?
It's pretty involved. You have to get the homeowner to ante up everything that is bringing him into foreclosure, you have to make sure that he's not lying to you, you have to make sure he hasn't filed for bankruptcy, you have to have the cash to either buy him out or the phone numbers for all of his debtors (plus the attny who is has filed the lis pendens) to see if you can work out a deal for his debts, you need to have the correct paperwork in line (how is he going to relinquish his equity to you? Not to mention you need to be able to call a ton of people in his name to even start the process) , you need to do a complete title search...it's not so easy...I wouldn't do it if I were asking for advice on this forum or any forum on how to go about it. You could get majorly screwed if you don't know what you're doing.

Anyone who tells you anything differently is lying to you. It's a huge risk if you don't have all of your ducks in a row and noone to guide you through it...like a real estate lawyer.
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Old 06-14-2008, 06:49 AM
 
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I bought a short sale and the mortgage lender and the seller are negotiating what the mortgage company is willing to except as an offer. In my case the seller agreed on taking a judgment which she has to pay off later and I got the home whith no liens what so ever, for the offer price I made. The title company searched the title and I got title insurance which is normal in a transaction in Florida. Waiting was the only thing I had to do and I denied the counter offer from the mortgage company so to make the deal happen, the seller took the difference as a judgemtn so she would get rid of the home. I think it was smart that she took it and she is a real estate lawyer specialized in foreclosures and her husband was the realtor in this case....at least this way she doesn't end up with a foreclosure in her name and her credit score will be better this way than having a foreclosure.
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Old 06-15-2008, 07:43 AM
 
69,372 posts, read 55,578,698 times
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Originally Posted by amb1s1 View Post
What is the processed to buy Pre-Foreclosure home?
Its not as complicated as someone else here made it out to be. The question is this.

Are you planning to pay the seller the amount of money they owe (in total) on the home, or are you going to try to get it at a discount (short sale).

If your going to pay the seller what they owe, (or more), proceed as normal, get a sales agreement signed, get a loan approved, submit the sales agreement to the bank so they know the sellers intent, and then go through a standard closing process. I say standard closing process because this involves hiring a title search, and paying for title insurance to make sure that there is no unknown leans against the house.

If you want to pay less then what the seller owes on the home, this is called a short sale. You need to get a sales agreement, and then the banks approval on the short sales price, to see if the bank will forgo the balance on the mortgage. If the bank will forgo the balance, go back to the previous paragraph and continue. If they wont, then the seller needs to decide if they will/can come up with the difference. If they cant/wont, then its a dead deal until the sheriff sale/resale process. If they can/will, then have the seller deposit funds into an escrow fund (as you will also), and then go back to the first paragraph and continue.
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Old 06-15-2008, 07:45 AM
 
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Originally Posted by JerseyG View Post
It's pretty involved. You have to get the homeowner to ante up everything that is bringing him into foreclosure, you have to make sure that he's not lying to you, you have to make sure he hasn't filed for bankruptcy, you have to have the cash to either buy him out or the phone numbers for all of his debtors (plus the attny who is has filed the lis pendens) to see if you can work out a deal for his debts, you need to have the correct paperwork in line (how is he going to relinquish his equity to you? Not to mention you need to be able to call a ton of people in his name to even start the process) , you need to do a complete title search...it's not so easy...I wouldn't do it if I were asking for advice on this forum or any forum on how to go about it. You could get majorly screwed if you don't know what you're doing.

Anyone who tells you anything differently is lying to you. It's a huge risk if you don't have all of your ducks in a row and noone to guide you through it...like a real estate lawyer.
Its no where near this difficult. You pay others to do a title search, and you purchase title insurance. I have no need to be concerned about any other debt the seller has, all I need to be worried about is what was liened against the property. Thats why you buy the insurance, to protect you from getting "screwed"..
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Old 06-15-2008, 11:44 PM
 
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Originally Posted by pghquest View Post
Its no where near this difficult. You pay others to do a title search, and you purchase title insurance. I have no need to be concerned about any other debt the seller has, all I need to be worried about is what was liened against the property. Thats why you buy the insurance, to protect you from getting "screwed"..
Yes it is. 99% of the time the homeowners have more debt than their house is worth. They've taken out HELOCs and re-financed several times over. A good part of the time they've got banktrupcty papers filed (and don't tell you). Also, the house is in disrepair. People who can't pay their mortgage aren't keeping up home maintenance.

It's not that easy - title companies won't give you insurance if there are any leins against a property unless they are resolved. Why would you pay a title company before you negotiate with the homeowners creditors?

Distressed homeowners want to walk away with some money in their pockets...either you've been really lucky or you have never purchased a true pre-foreclosure. Everyone would do it if it was that simple.

Last edited by JerseyG; 06-16-2008 at 12:01 AM..
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Old 06-16-2008, 02:08 AM
 
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It may vary state to state, but from my experience, it is not as complicated as it is being made. It can be very frustating though. You make an offer to the seller, if they accept, then the bank has to agree to the short sale and the terrms of the short sale with the property owner. This part is what can take so long...like months and even then the foreclosure may take place. If you have patience and can wait that is the chance you are taking. Also, property will usually be sold "as is". You should get your own inspection, but repairs may not be paid for by the seller. Also, have your realtor write the offer so that under certain conditions or time frames you can get out and not lose your earnest money.
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Old 06-16-2008, 07:05 AM
 
69,372 posts, read 55,578,698 times
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Originally Posted by JerseyG View Post
Yes it is. 99% of the time the homeowners have more debt than their house is worth. They've taken out HELOCs and re-financed several times over. A good part of the time they've got banktrupcty papers filed (and don't tell you). Also, the house is in disrepair. People who can't pay their mortgage aren't keeping up home maintenance.

It's not that easy - title companies won't give you insurance if there are any leins against a property unless they are resolved. Why would you pay a title company before you negotiate with the homeowners creditors?

Distressed homeowners want to walk away with some money in their pockets...either you've been really lucky or you have never purchased a true pre-foreclosure. Everyone would do it if it was that simple.
Note my previous thread. You cant automatically assume that the home owners are upside down on their mortgage when giving others advice.

No shlt title companies wont give you insurance with liens, thats the reason I very CLEARLY said to go through the standard closing process and to get title insurance, to protect the buyers.

Not all homeowners want to walk away with money, again, an assumption you cant make when giving others advice. Some want to lower their payment obligations with hopes of buying a smaller house down the road, thereby those individuals have a goal of protecting their credit.
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Old 06-16-2008, 04:02 PM
 
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Thanks everybody for their opinion. I think I will feel sad asking someone that is going to the foreclosure processed if they want to sell their house. I bet they get a lots of calls and mails. How do I go about contacting the owner?
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Old 06-16-2008, 04:45 PM
 
69,372 posts, read 55,578,698 times
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Originally Posted by amb1s1 View Post
Thanks everybody for their opinion. I think I will feel sad asking someone that is going to the foreclosure processed if they want to sell their house. I bet they get a lots of calls and mails. How do I go about contacting the owner?
Simply pickup the phone.

Things to keep in mind, look for signs of packing (more then normal trash out on trash night), gas meter shut off, grass growing higher then normal, all of these signal that the seller will listen to offers.

You can also call the bank, and while they arent legally allowed to give you information directly, the bank will sometimes hint around enough as to the sellers intent.

Best way is to simply call them, but remember that the individual might not be honest with you.. (I dont know what your talking about? Foreclosure? My house? No way.. (while they are packing up the bedrooms))
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