Foreclosure Purchase Problems - Posted by Wayne (MD)

Posted by JT-IN on January 27, 2002 at 18:17:10:


“first auction purchase and he discovered a few surprises”…

It is best to “totally” understand the perameters of forelosure, including timetables of Attorney’s and what rights the former owner has to occupy/vacate the premises.

The answer to which will vary greatly from state to state, but the important part is, to factor into the deal any of these costs, such as interest or evicitons. Many “new to foreclosure investors” tend to overlook or minimize some of the small issues, which become the difference between a good buy, and a so-so buy. I wish I were more familiar with MD law, to sight you specifics as to timetables there. I could do so locally, but that is of no value to the conversation.

In the case with dealing with law firms, it is best after knowing the expected time frames, to track each step of the way, intil completed. I usually will be in touch by phone with the Law Firm, to discuss any small delays, before they become huge delays. The (polite) squeaky wheel gets the oil… and the necessary legal paperwork.

With respect to tenants and occupancy, they are permitted so much time to vacate following the sale. Many new investors feel that the homeowner wouldn’t lie to them, (tee-hee). So what I do is, once the time for serving the notice has come, (even if a completely amicable relationship with the owner), I tell the owner that by law, I must submit this paperwork, serving them an eviction notice. This way they expect it, but it also officially starts the clock ticking, and saves much wasted time later…

Foreclosure is like any other process, it must be managed, and the closer it is, the more money it will save you.

Just the way that I view things…


Foreclosure Purchase Problems - Posted by Wayne (MD)

Posted by Wayne (MD) on January 27, 2002 at 17:15:28:

I met a rehabber last night who purchased a foreclosure at auction for $113,000 last March. It was his first auction purchase and he discovered a few surprises which are as follow:

  1. The lawyers involved with auctioning the property drug their feet on settling the deal until September. This cost the buyer an extra $5,000 in interest that accrued on the unpaid balance at a somewhat exorbitant rate. He was powerless to avoid this expense because the lawyers were not ready to accept the money and settle the sale apparently until they were good and ready.

  2. Coincidentally, the defaulting owner continued to live in the property and said she would not be able to move for ?a couple of months?. She eventually moved October 1 and then only after the purchaser got a court order. This seemed a little odd to the purchaser, because the woman being evicted actually had about $15,000 coming to her.

During all this time, my acquaintance could not do anything with the property, yet he was obligated to pay interest on the balance. So the questions here are:

A. How do you prevent the lawyers from stalling in a deal such as this (I suspect this may go on more than anyone knows)?; and

B. How can you get the occupant out of the property? In this case it was the owner, but the question applies to a tenant also?


Wayne Carpenter