Going directly to the seller

I have a situation where the Seller has their property listed as a Short Sale with an agent. This property is pending at $72k however the properties have closed at $90k+ and probably won’t get thru. Plus it is up for auction in Sept. It turns out that the Seller only owes $85k. Is it legal to go directly to the Seller and offer to pay off her loan at $85k and give her cash ($5K) to sell it to me? (strictly hypothetical). I see so many of these types of things on foreclosure radar and was wondering if this way of purchasing is legal.

Yes, that’s perfectly legal and fine to do.

However, it’s likely the seller owes more than $85. That might not include arrears.

And, you’ll need to get rid of the agent. Most agents will walk, if asked, in a situation like this. However, it would be wiser to offer the agent a few hundred to walk in order to get smoother cooperation. At the same time, the agent’s work is the reason you found the property in the first place. Just saying.

What’s the ARV on this?

It’s not a good deal if you pay market price.

Houses are selling for 90k and you want to pay 90k before repairs and closing costs?

There are better deals out there.

If you do want to do a full price offer, you should go through the realtor and let them figure out the realtor’s compensation.

Yes it is perfectly legal to pay the seller an amount which will completely cover the outstanding loan plus all of the fees and penalties. When this happens, it is no longer a short sale. It is simply a real estate transaction.

Another option is to buy the property at the auction. To do this, however, you will need to have all of your money there with you. Auctions do not allow time to go get financing.

The next option is to help the owner redeem their home, if your state has a redemption period. The owner is given a period of time to redeem the property for the auction price plus interest. You could create a contract saying that you will give the owner the redemption price plus a little extra in exchange for the home. That is perfectly legal as well.

You might need to consider that the agent has a listing agreement in place that would entitle him or her to the listing fee and as the owner is upside down, you will need to add this as a line item in acquisition costs.

Tell me again why you want to buy this at a loss?

Walk away.
H :banghead

Yes, its legal…no doubt.

Absolutely , that’s perfectly & legal.

I would recommend to hire an attorney for that.

It’s legal, but I think you have taken an advice/suggestion from expert real estate agency/agent.