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Answers (5)
- Michael Walker, "Michael Walker"
- Contributions:164
This can be a win-win situation for all parties involved. It's a win for the seller as they can avoid the emotional stress of going through a foreclosure and not totally ruining their credit. Bad things happen to good people, and hopefully by avoiding a foreclosure, they'll be able to purchase a home in the near future. It's a win for you because often you can purchase a property at a good value. It's a win for the neighborhood because the home likely will not sit vacant and there's less of a chance of vandalism.
- Susanne Novak, "OhioPrettyHomes"
- Contributions:3708
Hi John, a pre-foreclosure is usually a property where the owner (seller) has fallen behind on mortgage payments. Question here is: once the loan and any other liens are paid off by a prospective buyer, is there any equity left? If that's the case, you can come to an agreement with the seller. Otherwise, if the seller's lender has to take a loss, then it's up to the lender to approve a short sale and this process can take months.
- Cindy LaPeer ABR, e-PRO,SFR, Cdrs, "Houston Metro Pro"
- Contributions:2239
It is not up to the owner to take a lower offer. It is up to their lender. If you mean that there is some equity in the property and the owner can walk away with a little in their pocket, then it is not a short sale. Find a local agent who is experienced in short sale transactions. He/she will be able to guide you.
- James Callas, "ABBAUSA"
- Contributions:960
www.realtytrac.com
the above link is a good place to find and research foreclosures.
be careful and do your homework.
Good Luck!
James Callas - Realtor®
the above link is a good place to find and research foreclosures.
be careful and do your homework.
Good Luck!
James Callas - Realtor®
- Jennifer J. Erickson, "OaklawnRealty"
- Contributions:349
Hi John.
Pre-foreclosure is what is known as a short sale. But if this seller has enough equity to payoff the all the liens on the property and break even or can cover the short fall; it maybe worth it. You need to get all the information you can regarding liens on title of the property. I can't speak to Ohio's conveyancing practices, but if you are financing, the lender will do the title work. Hire a real estate attorney and put the house under contract with this seller; if you are working without a selling agent, then have your attorney hold any earnest money. Apply for your loan and ask that the title work gets done as quickly as possible. The lender's attorney will find out what liens are outstanding on record. If the seller is not represented then your attorney needs to get all the payoff information to gain clear title. If it turns out that the seller needs his lender's approval to sell the home -- it is a short sale. At this point it up to the seller to complete a package to prove hardship to the lender and the lender will have to complete its due diligence to approve the sale. If it doesn't work out and the lender does not approve the sale, you should only be out of pocket the application fee for the loan and some attorney fees. Negotiate this upfront so you know your maximum exposure with both lender and attorney.
The most important point is you have done your market research and have a good idea of the property's value going into this deal. It should be at a decent discount to other similar properties for the work and risk you are taking on. Best of luck!
Pre-foreclosure is what is known as a short sale. But if this seller has enough equity to payoff the all the liens on the property and break even or can cover the short fall; it maybe worth it. You need to get all the information you can regarding liens on title of the property. I can't speak to Ohio's conveyancing practices, but if you are financing, the lender will do the title work. Hire a real estate attorney and put the house under contract with this seller; if you are working without a selling agent, then have your attorney hold any earnest money. Apply for your loan and ask that the title work gets done as quickly as possible. The lender's attorney will find out what liens are outstanding on record. If the seller is not represented then your attorney needs to get all the payoff information to gain clear title. If it turns out that the seller needs his lender's approval to sell the home -- it is a short sale. At this point it up to the seller to complete a package to prove hardship to the lender and the lender will have to complete its due diligence to approve the sale. If it doesn't work out and the lender does not approve the sale, you should only be out of pocket the application fee for the loan and some attorney fees. Negotiate this upfront so you know your maximum exposure with both lender and attorney.
The most important point is you have done your market research and have a good idea of the property's value going into this deal. It should be at a decent discount to other similar properties for the work and risk you are taking on. Best of luck!
how does buying a pre-foreclosure house work?
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