Re: Trustee’s Sale! - Posted by Ronald * Starr
Posted by Ronald * Starr on August 23, 2001 at 14:50:05:
Yes, you’re right, buying from owners facing foreclosure is pretty much like buying from any other owner. You can take it through an escrow, you can have title insurance, you can have disclosures by the seller, you can have inspections by contractors, roofers, termite inspectors, etc.
In that way this way of buying is far safer than buying on the “courthouse steps,” as you put it.
However, depending upon the state in which you do this, there may be some special laws relating to what you can say and do with the owners. You do not say in what state you are. However, you are in a trust deed state and the title company helps you out. That sounds like CA to me.
In CA there are specific laws regulating the types of deals one can make with a homeowner-occupant when they have had a notice of default filed against their property and the property is a residential property of 4 or fewer units. Study the law carefully. There are severe penalties for those found in a trial to have violated these special laws and done things the “normal way.”
When the real estate market is hot, one will find few property owners who are in default who will sell for a bargain price. Many will list the property for sale with a real estate brokerage. The property will sell promptly, and before the foreclosure sale the property will be owned by somebody else, with the old, defaulted loan probably paid off. If not paid off, taken over subject and thus not pressing the owner to sell.
But whenever you try to buy bargains you will find it difficult. There is no easy way to get bargains, as far as I know. If there is, those who know about it have not been making it public. So, if you want to check out the pre-foreclosure approach to buying bargains, give it a try. Maybe you have the touch. I once met somebody who made a great deal on the very first defaulted house upon which he knocked on the door. He continued in the business for a years thereafter.
Good InvestingRon Starr*********