Posted by Channel Sanderson on March 28, 2006 at 21:20:43:
I and my partner purchase dozens of properties out of foreclosures.
I’m writing because of something that’s happened to me 3 or 4 times this year. I guess it just worries me.
I make an offer on a property and the seller goes with another offer. That’s fine. Often the offer is higher than mine. No skin off my nose. I have lots more to make offers on. The problem is that the person making the offer hasn’t done sufficient homework or hasn’t got his/her ducks lined up to do the deal. I get a call the night before auction and the seller is frantic. They lose it at auction because I can’t even do a proper title search with less than 1 day.
It’s not losing a chance to buy a property that bugs me. It’s having a seller hurt more than necessary. So, being an ethical bottomfeeder, I’m going to ask you to do two things.
Tell your prospective seller at least a week in advance of the foreclosure auction that you can’t do it if it doesn’t work for you. Give them time to file a bankrupcy or w/sufficient equity, get a refi or another investor.
Find an experienced ally in the area that can back you up if you end up not being able to do the deal. The ally will give you a finders fee and you will feel good about not screwing up the sellers life any further than they did themselves. The ally will also be able to clue you in about which local banks give rehab loans or what websites to peruse or whatever. Ingratiate yourself with them and you may pick up a wealth of knowlege. Local knowlege that you can’t get here.
Actually, if you approached my company, I may tell you to take a hike. lol. Try an established practice in a nearby county. Someone who doesn’t compete in your backyard.
You’ll also be a fine upstanding citizen of the REI community.