What should I have done? - Posted by TRandle

Posted by Bud Branstetter on December 28, 2000 at 19:34:55:

Phil,

I’ll agree that the seller is not a factor here except for the fact that in this market the bid may well be 100K+ for this property if it goes to the courthouse steps. I’ve never redeemed just before the auction with a second. The practice here seems to be on Friday so you can get a TRO if they do not cooperate. I’ve had friends buy seconds being foreclosed and the first didn’t let them redeem an went ahead and foreclosed later. Not enough resourses to fight it, I guess. Will I might give the seller 5K most if not all would be off in the future.

Have fun at the convention. I’ve got an anniversary at that time so I will not be joining you. Vacation the first part of March and cruise in May. Got to work some time.

What should I have done? - Posted by TRandle

Posted by TRandle on December 28, 2000 at 12:30:19:

Here’s the quickie details:

1,700 s.f. SFH listed with realtor for 150k
ARV is approx. 150k to 155k
house has 5 exterior doors
was recently reconverted back to SFH from "triplex"
needs 3k to 4k in general cleanup and cosmetics

1st is 75k with 7k arrears; 8% fixed; $1,056 per mo.; 23 yrs left
2nd is 43k with 4k arrears; 14% fixed; $574 per mo.;
prop tax is 3k+ - not paid yet

I do not (still) have an agreement on this house because I could never get the seller to tell me the amount she wanted. The first lien is foreclosing on Tuesday the 2nd. I got in touch with the first lienholder for the reinstatement figures.

Initially, the seller told me the 1st was 4k behind and the 2nd was only 40k and current. So, after finally getting accurate figures that added 11k to my numbers, I told the seller I could only do this if I can get the 2nd at a discount - still couldn’t get a number out of her or a contract.

I contacted the 2nd lienholder and explained the situation since they were unaware they had less than a week to act. I also made their job easier since I provided all the necessary info for them to cut me out of the loop.

Anyway, I sat down and typed out John Behle’s contracts and exhibits (for days, joking) and sent the 2nd an offer for $1,500, which was rejected. They said they would need at least one-half of the balance. Now, I realize this is a decent deal at this point if I want to step into their shoes and foreclose on the 2nd. I decided I didn’t want to do that and told the seller I’m done.

Finally, I get a number out of her - $5k, so now I’ve called the 2nd back and offered 20k, plus reimbursing them for costs to reinstate the 1st. My verbal offer to the seller is 5k and I have no responsibility for the realtor or property taxes (paid out of cure amount?). What other alternatives did I have that I didn’t see? Thanks…

Re: What should I have done? - Posted by David Alexander

Posted by David Alexander on December 29, 2000 at 02:47:22:

With the time frame I wouldnt be bothering with the seller either. I’d be calling the second the using Joe’s close and see where it gets you, until you can find the number that they’ll take to do the deal… I mean Tuesday is gonna come and go pretty quick here, Your just about going to have to be able to hand deliver money to cure everything by Tuesday since Monday is a holiday.

That means once you get a verbal ok from the second then you need to get cash to them quick and an assignment… Get to the first and reinstate quickly after you have control.

The other route is to promise the seller something, little to nothing and in the future, get the deed signed off, Ask for a payoff on the first and try to get an extension by giving them a contract to buy the property on a quick cash close and then instead get an assignment of the first and finish the foreclosure.

David Alexander

You’re negotiating . . . - Posted by JoeKaiser

Posted by JoeKaiser on December 28, 2000 at 20:23:56:

We bought a property this year where the lender was owed $78k. Property included a junker mobile ('94! you’d think it would have lasted longer), and the lender advised that they’d “have to net $28,000.”

I got back in touch to let them know I’d send my guy out to “assess the damages” since I knew it was messed up badly. I always like to ask, “if I can’t get you the entire $28k, should I still go ahead and send an offer?” and then listen closely to guage the response. Believe me, it’s almost always “yes, send us an offer.”

The offer we sent, and the one they ultimately accepted . . . $14,750.

Just because the lender tells you they want half doesn’t mean that’s the least they’ll take. I’d hit them again.

“If I can’t get you the whole $XX, should I still go ahead and send an offer?” Use that close and listen to the response. It’ll make you a ton.

Joe

Re: What should I have done? - Posted by phil fernandez

Posted by phil fernandez on December 28, 2000 at 19:15:14:

Hey Tim,

Glad you’ll be in Atlanta again.

I think steph, below hit on a point where she says, by pass the seller altogether. The auction is set for Tuesday, Jan 2nd. The seller at this point doesn’t have much negotiating room. Tell her you’ll give her $5,000 less than what she wants.

Have fun at the auction. You already know that the 2nd will discount. Could you either buy the 2nd at the discount before the auction or get some kind of an option to buy the 2nd at a set price.

Forget the seller. At this late stage the seller is no longer a factor.

Someone check me on this… - Posted by steph in tex

Posted by steph in tex on December 28, 2000 at 18:08:14:

Can you not buy out the second, let the thing go to F/C, approach the trustee at sale and have the right to cute the 1st? I haven’t done it, but it seems I remember this from somewhere. Need a pro on this~Kaiser?
You cut out the seller, who’s taken way to much time MHO. If you can save 5K, might as well. The property is vacant, and not her home, right? If so, she was probably rent skimming with the triplex.
I beleive as the owner of the 2nd, you have the right to cure at the steps, but check me on this.
If this works, I’d leave it listed and get it priced to MOVE. The rest will be cake.
Good luck

steph in tex