Posted by Ben (NJ) on May 29, 2000 at 08:23:27:
One thing you may not be focusing on is the state of the title, i.e. senior debt, there may be huge tax liens on this property (municipal, federal and state)which you would be responsible for when you take title. Call your local tax collector and find out if there are muni liens. You also need a title report and upper court judgment search. You may not have time to do this properly but maybe your attorney can call in a favor. Good luck.
Help with foreclosure opportunity needed - Posted by JohnH MI
Posted by JohnH MI on May 28, 2000 at 12:19:21:
I have come across a foreclosure that is going to auction in about 2 weeks. Can not find the owner. They have high tailed it, neighbors don’t know anything about there where abouts. I am thinking about attending the sale at the courthouse.
Opening bid is $7000. The house was purchased in 1991 for $41,000 by the defaulting owners. Comparable homes in good condition fall in the $48,000 - $54,000 range. The house needs work to be put into good condition. The problem that I am faced with is determining the fix up costs with out being able to go inside and inspect the house.
The house has been declared abandonded and so the redemption period is 1 month. I need advice on how to proceed. I would like at least one crack at the owners, but have found no sign of them. If I don’t contact them before the sale, I am considering trying to buy at the sale. Is there a way to determine fix up costs accurately by just window peering? I have never bought a house at a foreclosure sale and I am unsure of the risks. I plan on speaking with an attorney after the Holiday weekend. What are some of the things I should be aware and ask in regard to purchasing at the sale. I see potential in this deal, need your help in developing a strategy. Time is short.
Thanks
John
Re: Help with foreclosure opportunity needed - Posted by ScottE
Posted by ScottE on May 29, 2000 at 10:21:58:
John,
You may look in the court file (if it’s a judicial foreclosure)and see if the process server was able to find the owners. If not found, the attorney can usually get service ‘by publication’.
In any event, the process servers are a good, cheap way to skip trace. Depending on how much they owe and what the competition may be at the sale, you may want to find the owners first.
Keep us posted on the outcome
Scott
Thanks for the advice! nt - Posted by JohnH MI
Posted by JohnH MI on May 29, 2000 at 08:21:45:
Thanks for the advice!
Re: just a suggestion… - Posted by njdave
Posted by njdave on May 28, 2000 at 20:47:18:
I’m confident that the home has had the locks changed, and probably winterized (if you are in a cold climate).
There may even be a Realtor’s lockbox on it.
Find out who the Plaintiff is in the foreclosure. You may be able to glean from the foreclosing lienholder or their attorney the name of the foreclosure field servicer who 1) change the locks, 2) drain water from pipes, 3) secure swimming pools, etc. and who prepare their BPO’s or CMA’s that most mortgage loan servicers rely upon when determining their upset price at Sheriff’s Sale, Trustee’s Sale, or Public Auction.
Find out that Company (they may be registered with your town as the person to contact in case of an emergency) and ask what their inspection disclosed.
The worst that they can say is, no.
A nasty trick would be to call the foreclosing lienholder and tell them that you want to report a problem/emergency with the house. Leave your name and number as a ‘concerned neighbor’ and maybe they’ll call you back. They’ll dispatch a field tech. If you speak with or meet the field tech at the property “to point out the problem”, you may be able to get a walkthru.
I’ve never done this, but if you really, really, really want to see the inside, it may be worth a shot.
Re: Help with foreclosure opportunity needed - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on May 28, 2000 at 14:05:39:
John,
Peering in the window is better than nothing at all. However, that won’t tell you if the water heater works, if the AC/heat work, if any pipes are broken, if there are electrical problems, etc. You might get a good idea about the condition of paint, flooring, kitchen and fixtures. Nonetheless, if I were going to bid on a home I couldn’t examine prior to the sale, I’d make allowance for the replacement of all major systems.
Ron LeGrand has a great course on estimating rehab costs. Here’s a quick rundown on some of the numbers I use in my area (Phoenix). These numbers are based on a 1500sf home.
AC/Heat Unit: $2,000
New Kitchen (including appliances): $2,000
New Flooring: $2,000
Interior/Exterior Paint: $1,500
New Bathroom: $1,000 each bathroom
New Roof: $2,500
Windows/Doors: $100 per pane (depends on size, of course) or door
Landscaping (front AND back): $3,000
Misc. Costs (Electrical/Plumbing): $1,500
So, I would anticipate needing about $16,000 to repair a 1500sf property that I couldn’t inspect prior to purchase. Assuming that your After Repaired Value (ARV) is $48,000, and using Ron’s formula and my repair costs, you should not spend more than $17,600 for this property.
I hope this helps.
Bill K. (AZ)