Option a Pre-Foreclosure????? - Posted by Jason


#1

Posted by Eric (NH) on December 17, 1998 at 23:40:04:

COUNTY sounds big enough for me!

Eric


#2

Option a Pre-Foreclosure??? - Posted by Jason

Posted by Jason on December 15, 1998 at 23:41:43:

My wife works in the courthouse and opens all the Foreclosure files for the entire county. I wanted to know if it’s possible or smart to Option a property in Pre-foreclosure? How should I do this? Any opinions would be greatly appreciated!!! (p.s. Give an example)

What is the upside/downside to Optioning a Pre-Foreclosure?

I thought I should take advantage of my wife’s position!

Thanks Again Everyone,

Jason.


#3

win-win-win-win - Posted by hk CA

Posted by hk CA on December 16, 1998 at 13:27:08:

Providing you have enough time before the trustee sale, you can use an OPTION TO PURCHASE (not a lease/option) to tie up the property while you attempt to find a buyer. For example: You go to the person that is in default and say, “I want to help you get out of the mess you’re in and I think we can both make a little money. I’ll give you $100 now for the OPTION TO PURCHASE your home (for a set number of days) and I’ll give you another $1000 when we sell the place (The figures can be adjusted). In the mean time, you can stay where you are and most likely we can save you from going through foreclosure. Now, I need you to co-operate by allowing me to show the property to perspective buyers. I am experienced in doing this, so the chances are very good we can get this matter straightened out. Do you agree?”

With the OPTION TO PURCHASE in place, you have time to try to find a buyer without the worry of anyone else buying the property during the option period. You’ve turned the possibly hostile homeowner into a co-operative partner. The homeowner stands to gain from it. You stand to gain from it. A new buyer stands to gain from it. The lender stands to gain from it. Nobody loses.


#4

Re: Option a Pre-Foreclosure??? - Posted by Irwin

Posted by Irwin on December 16, 1998 at 05:04:10:

You have the advantage of spotting motivated sellers early on. They don’t always want to sell, but often have to in order to avoid losing the home. To l/o a pre foreclosure you have to be prepared to cure the default. This requires some cash, but if the deal ia a good one, you should be able to find it.


#5

Re: Option a Pre-Foreclosure??? - Posted by johnman

Posted by johnman on December 15, 1998 at 23:59:06:

I hope I read your post correctly. Your wife has access to foreclosure files for the ENTIRE COUNTRY? Just wondering.

Johnman


#6

Re: win-win-win-win - Posted by Ray Richardson

Posted by Ray Richardson on December 16, 1998 at 21:34:23:

Am I the only one that thinks the above negotiating stance comes perilously close to practicing real estate without a license? Any time you tell the sell you will “find them a buyer”, aren’t you effectively acting as their agent? Not that I’ve got anything against straight options, it’s just a matter of the words you use and how you present yourself, no? Perhaps this is all a technicality that never gets anyone in trouble, I’m not experienced enough to know.

-Ray


#7

Re: Option a Pre-Foreclosure??? - Posted by johnman

Posted by johnman on December 16, 1998 at 19:38:31:

Irwin,
I just received my first call on my ad and its is a pre-foreclosure. I have posted my situation titled “possible first deal. Need guidance”. Would you please read my post and maybe give a few tips? I’m interested in curing the default.
Thanks,
Johnman


#8

He Said COUNTY (nt) - Posted by MichaelR (NoVA)

Posted by MichaelR (NoVA) on December 16, 1998 at 02:27:43:

nt


#9

Re: win-win-win-win - Posted by hk CA

Posted by hk CA on December 16, 1998 at 21:56:18:

By purchasing an option from the owner you have in effect created an interest in the property which allows you the right to find a buyer. The property owner was paid an option fee of $100 for this right. He is later paid another $1000 as part of the option agreement, provided you exercise your option. You have agreed to help him out of a bad situation by buying his property, not by finding a buyer for him. You are finding a buyer for yourself. When you do, you have several choices. 1. To purchase the property and then resell it to the new buyer. 2. To assign your option to the new buyer. 3. To take title “subject to” the existing mortgage. Then l/o or l/p it to the buyer. 4. Use other creative ideas to your advantage.

Although it may first appear as if you are acting as an agent, you are basically doing a flip of the property.


#10

COUNTY ! OOps!! Sorry!!! - Posted by johnman

Posted by johnman on December 16, 1998 at 19:32:46:

thanks for the correction. I guess I was going blind or something. Sorry!!
Johnman