Really you tell them that you are in the business of buying properties but first you look to see if there are options available (refinance, forebearance agreements with the lender, etc.) that allow them to keep the home if that’s something they want to do (some know they want to sell now and don’t want to explore those other options). Have contacts with reliable mortgage brokers for refinancing. Know how to negotiate a forebearance agreement. Just don’t paint yourself as strictly trying to help and out of nowhere you suddenly want to buy the house. That’s where you’ll run into trouble.
my game plan (and I’m in IL) is to approach homeowners in pre-foreclosure with intent to HELP them, first and foremost.
However, I’ll only be approaching those with a nice equity spread hoping that if the owners don’t want to keep the house, they’ll think of me before they’ll think of other investors before selling their home.
Now, I understand that CO recently passed a law that makes it illegal for a foreclosure consultant (or a person who helps the homeowners in foreclosure, even if they don’t charge a FEE) to then buy the home of the person they’ve been helping.
Is my understanding of the new law correct?
What is the way you are finding works for you? I mean, the owner will not want (or need to) sell in all circumstances…
It is because of duplicitas ‘investors’ like you that the law was necessary. I need not concern myself with the new law because I don’t make misrepresentations to property owners. Please do everyone in Colorado a favor and just HELP people in IL.
should be directed toward your legislators. Looks like they’ve botched it.
CA was one of the states that started this law and in their definition, a consultant is defined as a person who for a FEE is helping the homeowner. This person, is forbidden, explicitly, from taking the deed from a homeowner.
But CO statue (in my opinion, and I’m not an atterney, not giving legal advice) omits this ‘for a FEE’ part. So, anytime you talk to the homeowner in foreclosure, that has NOTHING to do with your purchase contract, could be interpreted as HELPING them, which in turn, would prohibit that individual from taking title to the home being foreclosed.
Which brings you back to what Hayseed was talking about. Forget about the ‘helping’ part and buy the property. It doesn’t seem like “first and foremost” you really want to help them when you only want to deal with folks with huge amounts of equity. So I agree…get off the “I want to help you” tip if it aint genuine.
why is it a problem to genuinely want to help the homeowners in foreclosure with their situation? Many people don’t know what ALL of their options are. Why should it be a problem for me to present them with ALL options?
I’m not talking about people with no equity, but those that have at least 30-40% equity.
Also, I’m not talking about misrepresenting anything. I come out as a person who (a) KNOWS the foreclosure process, but who is NOT a lawyer and not giving legal advice, and (b) a person who can BUY their home if they CHOOSE to sell it.
If my friend or a relative ever happen to be in a foreclosure, I’d much rather have them talk to someone who presents ALL of their options to them vs. someone who ONLY does consulting or ONLY buys their home.
Peeny’s right. However, I DO believe that you want to help people. I just don’t think you want to do it “first and foremost” as you claim. You really want to make a profit first and foremost and I have no problem with that. I do as well. But be honest with yourself, or at least with us. We understand the marketing behind it no matter what you tell a seller. The mere fact that you’re only dealing with sellers with ample equity means that profit is first in your efforts and your willingness to HELP is secondary.
If you genuinely wanted to help people in foreclosure situations, you would not be restricting who you will help. The people with no equity need the most help, while those with equity have a lot more options. So your approach is really a creative marketing campaign. The services are essentially a screening activity to find clients with the desired amount of equity. Be careful not to misrepresent your intent, lest you find yourself accused of whatever people can come up with.
A consultant who also wants to buy my home has an inherent conflict of interest. While there is value in knowing someone willing to purchase in such a situation, I would not count on a presentation to be truly independent and in my best interests.
Foreclosure is a serious situation and not the time for one stop shopping. I’d advise my friends and relatives to get two second opinions with at least one from an attorney.
And since people with equity are the most attractive prospects to investors, they’ll be getting a plethora of mail & phone calls from other investors. I’d be advising them to get multiple bids for the property. Maybe yours isn’t the best offer.