Posted by Redline on March 16, 2001 at 23:44:07:
I suppose, I’ve never tried dealing directly with a bank for a property that was foreclosed. Around here banks use realtors pretty exclusively for their listings. I’m sure there are insiders that get deals directly from banks, but I’m not in that club.
RL
POST FORECLOSURE SELLER WANTS HELP - Posted by Bob
Posted by Bob on March 16, 2001 at 18:45:32:
I am a relative newbie in RE and need your help with how to approach the sellers situation. He called on my ad in the paper.
I only briefly talked to the seller. He has been in his house for 5 years and made a downpayment of $30K when he bought it. It was appraised for $141K two years ago. The bank foreclosed and according to him the process is complete and the bank owns the house but is giving him a chance to buy it back or find a buyer. The bank will sell it for about $93K which was his loan balance. He says he has until next Tuesday to do this. The house is 5BR, 2BA, 3 car garage, two decks, and a finished basement, and in good condition.
He has $20K in cash but does’nt think he can get a loan to buy it after the foreclosure. He wants me to buy the house
and lease it back to him for 2 years at which time he will buy it from me.
Since he is no longer the owner would’nd I be negotiating to buy directly with the bank but I also need him to give me the informtion. I have not looked at the house or done any due dilligence yet.
Please help with your suggestions on how to proceed with this deal and what points to be carefull with.
Re: POST FORECLOSURE SELLER WANTS HELP - Posted by TSO
Posted by TSO on March 17, 2001 at 09:44:21:
Bob if the owner has $20,000 now, sell it to him on a land contract at $150,000 with a $20,000 down payment. That $20,000 should more than cover the repair and legal expenses when (NOT IF!) you have to kick him out. If he is willing to put up the $20,000 then this is a great deal.
TSO
Re: POST FORECLOSURE SELLER WANTS HELP - Posted by Redline
Posted by Redline on March 16, 2001 at 19:23:23:
Be afraid - be very afraid. Sounds like this guy already lost the house and what he might be referring to is his redemption period. Some states have a time where the owner can buy back the house after the foreclosure. I’m not sure if that’s the case here but it sounds like it.
In any event, I would NOT be dealing with this guy at all. If he was too dumb/broke/whatever to save the house beforehand I sure don’t trust him now. If he has $20k now - why didn’t he save his house in the first place!
Also that $93k price - that may just be his redemption price - you may not be able to get it for that, I have no idea really.
This doesn’t sound like something a newbie should be involved with.
RL
Re: POST FORECLOSURE SELLER WANTS HELP - Posted by Rose
Posted by Rose on March 16, 2001 at 22:49:38:
I am newbie and working on similar deal. There is a lot of equity in the house according to Bob. I would try purchasing it from the owner first, but wouldn’t lease him back if his financial condition is really bad. You can’t trust to get your monthly rent paid from these guys.
I am thinking of offering my owner who is aksing me to lease back to him to purchase later the following.
This is what someone suggested me to offer him first months rent some place else (to get him out of the house.) Depending upon how much equity you have in the house, you can also help him by paying moving epenses, any other costs you feel comfortable with.
I don’t know this makes sense to you or not, it does to me. So I am actually going to try this when I meet him this Sunday if every thing else looks good.
Question Redline and others… - Posted by ib (nj)
Posted by ib (nj) on March 16, 2001 at 22:48:26:
Could he bypass the buyer and tell the bank that as soon as the redemption period is over, he’s willing to buy at the “loan balance”? I’m curious because I’m sure I’ll run into this problem sooner or later.
Re: POST FORECLOSURE SELLER WANTS HELP - Posted by Redline
Posted by Redline on March 16, 2001 at 23:47:36:
If you read Bob’s post again you’ll see that the house is already foreclosed. So, the owner is the bank - not the “seller” he’s referring to. And as far as purchasing someones’s redemption rights, I dunno about that.
As far as lease-back to the seller and letting him stay, it’s not something I’d be comfortable with at all.
RL