Buying pre-foreclosure

posted 3 years ago in Home
Post # 3
Member
11734 posts
Sugar Beekeeper
  • Wedding: November 1999

Do you have a real estate agent?  Our agent was able to answer all of these types of questions for us.

Post # 5
Member
3265 posts
Sugar bee
  • Wedding: February 2014

The old rental we lived in before we bought our house now was going through the foreclosure process. I even tried calling the lien holder and they told me nothing could be done until it went to sheriff’s sale and was transferred over to a new owner through that. No idea if it’d be the same for where you’re at.

Post # 6
Member
11734 posts
Sugar Beekeeper
  • Wedding: November 1999

Hm, okay.  Technically the buyer doesn’t pay for his real estate agent, the seller does, but I guess in your case, there isn’t a seller’s agent either. 

I’d suggest meeting with an agent to see your options.  They only get paid once the contract is final, so it’s not like it will cost you anything other than time!

Post # 8
Member
1311 posts
Bumble bee
  • Wedding: March 2015

@bkrocks13:  Have you talked to your landlord/owner of the unit? He or she can negotiate with the foreclosing bank or entity by offering up a potential buyer and paying off some or all of the mortgage debt from the sale. I currently have a foreclosure case (in NJ, though we also do NY) where that’s what our client is doing with the borrower/mortgagor. Otherwise you’d have to wait until the bank or entity has obtained the foreclosure judgment and then sets up the sale, or see if they set up a short sale for the unit.

Post # 10
Member
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

@bkrocks13:  This is very complicated from a legal standpoint and i’d really recommend having both an agent and a lawyer on your side to handle this. Unless you are a seasoned veteran of real estate transactions, this is just asking to be taken advantage of somewhere in the fine print, etc.

IMO, no proerty is worth what you’re going to have to go through to get this home. I’d walk away and keep looking. An MIA owner and a representative management company that isn’t responsive is a glaring red flag. Does the management company even have the power to sign off on selling the place? If not, the fact that you can’t deal directly with the owner is a huge deal.

Post # 12
Member
1311 posts
Bumble bee
  • Wedding: March 2015

@bkrocks13:  The lawyer who you consulted is right in that there’s nothing he or she can do unless you have a contract of sale on the table. If you REALLY want to try and get this unit, I think that yes maybe get a broker to act on your behalf or you can contact the finance company directly regarding your interest. The problem is that there is no benefit to them to sell it to you. They’d rather get the foreclosure judgment because it legally gives them the right to pursue any deficiency in case the property sells for less than what’s due on the mortgage. Also sometimes they’re interested in buying the property themselves and that’s why they purchase the loan through assignment from the original mortgagee.

There’s also no benefit for the broker (unless you have a family member or close friend willing to bat for you) because it will be a lot of extra work when they can just get an easy commission from a regular sale.  Extra work plus lower commission (which is a percentage) since you’re trying to get the unit for less than market price.  I don’t mean to be a debbie downer, just giving my practical opinion on the matter. Disclaimer – this is not legal advice and not to be taken as such. 🙂

Post # 13
Member
1311 posts
Bumble bee
  • Wedding: March 2015

@bkrocks13: To add, that’s why I suggested getting the landlord/owner to broker the deal. Then they could also execute a stipulation or agreement where he has to pay the rest of the amount due on the loan after getting the proceeds from selling the unit and so the finance company is protected in getting its money back.

Post # 15
Member
1311 posts
Bumble bee
  • Wedding: March 2015

@bkrocks13:  Glad to help! If you get a court order or pleading that you have to turn over your rent to the finance company, then you need to follow it. Plaintiffs can make motions to collect the rent prior to foreclosure judgment. But it’s good that you’re holding the rent in escrow for the time being.

Another point – if there are tax liens encumbering the unit, then you or the finance company need to pay them off prior to your getting ownership. Otherwise it’s a cloud on title and lowers your equity in the home. If you live in a condo or co-op, you also need to check on the monthly maintenance because chances are that the owner has defaulted on these payments too and you will need to pay them. It forms another lien on the unit.

 

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