I have my eyes set on a property that’s at the end of the foreclosure process. It is not yet listed on the MLS. I know which bank (out of state) owns the home and I have the foreclosure trustee’s name. Who would I contact in this situation to offer to buy it before it goes to auction or is listed?
If its not a small local bank, the bank probably has a “process” that includes getting it listed on the MLS through a discount realtor and waiting for bids. I find that no matter what the comparable properties are going for or what the estimated repairs might be, the big banks simply won’t/don’t negotiate much. In my experience they simply let the properties sit for some specified length of time and then lower the price a bit. Still no bids after sitting means another small price reduction and let it sit again. This cycle goes on and on until some uneducated buyer overpays for it.
Ok, so I found out it is up for auction on june6th. It is my understanding that there is still time to buy from the owner/or he has a chance to get caught up on payments. I sent a letter to the trustee (lawyer) asking simply if the property was still in the foreclosure process and received this in return:
Please be advised, I do not have authorization to discuss this file with you. Please submit written authorization from the borrower in order for us to disclose this information.
I heard they can be troublesome to deal with, but isn’t this public information?
If the property still has not been completely foreclosed, it is still owned by the owner. If so, the only person who can sell you the property is the owner. The problem I have found in dealing with pre-foreclosures in the past several years is that the owners owe more than the property is worth. I’ve had no luck dealing with the banks trying to get short sales on any of around 15 - 20 properties I have tried.
I suggest contacting the owner and getting the specific numbers on the property.
As long as the property has not completed the auction process, you can buy the property through the seller direct. If your offer amount is less than the mortgage payoff (plus fees and extra interest etc) then a short sale would need to be initiated. When auction dates are really close, this may not be a possibility.
There is the option to purchase the property via the auction but you will need 100% of the cash on hand to pay for it.
There maybe a redemption period where the original owner can pay the auction price and redeem the home. You could feasibly initiate a transaction with the homeowner at this point - but act quick as these windows close quickly in many states.
Buying a foreclosure is not easy. The house had been in pre-foreclosure , means the owners had defaulted on their payments & received a notice of default from their lender. The bank probably has taken some action and auction . It is an good opportunity to buy a house at a lower than market-value price.
For most people, buying a house is the largest purchase they will ever make. One way to help ensure you get the most house for your money is to buy a foreclosed home.
Real Estate Canada
The thing about foreclosures is that they offer an excellent opportunity for investment. Normally these homes are being sold way below what their actual value is. That is a golden opportunity that should be grabbed and taken advantage of.
This may have been the case, but it is not always true now a days. The market is quickly changing and banks realize that they can get almost market value for these properties. Plus, they are being sold “AS IS” and if the cost of repairs are underestimated, the total investment may be more than market value.
Good values can be found, but a buyer must not be rash and be willing to spend the time to due their due diligence and honestly count the cost.
Buying a foreclosure is definitely a bit of a grind. It’s not easy… You’re getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want… !