How to buy BS in foreclosure

Hire an attorney to approach the owner for you, without giving your name to the owner. The attorney is making an inquiry, saying his clients learned the house is in pre-foreclosure and they are sorry for this person's troubles, but his clients are interested in buying the house. They aren't flippers but a young couple looking for a home they can afford. And if the owner is open to discussions make an offer.

Posted by: guest at March 11, 2008 7:21 PM

I know someone who did this with out a lawyer, but it was not easy. They bought the place from two brothers who were fighting for years and would rather lose the building through foreclosure than see the other brother get it. In the end money talked and the brothers "sold". I remember they used to get their pre forclosure info from a bank they did business with. Someone would tip them off everytime something looked good.

Posted by: guest at March 11, 2008 11:42 PM

Actually Denton, if the house is in PRE-foreclosure the owner might still be trying to figure out a way to not go fully into foreclosure; so selling it quickly without paying realtor fees could be very helpful to the owner. Some owners are elderly or for whatever reason don't have any help figuring this stuff out. They might be too embarrassed to ask neighbors for advice.

Posted by: guest at March 12, 2008 1:29 PM

Interesting, 11:42. Houses that sit forever neglected are often simply stuck in family fights like that. In my mother's huge family none of the older family members ever passed away without some of the family fighting over their houses. One old house sat boarded up so long with all the contents inside everyone was fighting over, that one day somebody pulled up in a truck, broke in and emptied the house of all its antique furniture. It used to be so common to do this, many antique stores' inventory came from raiding abandoned houses.

Posted by: guest at March 12, 2008 1:32 PM

I think you need to be more than a semi-serious buyer to buy a house in pre- or actual foreclosure. I've had friends who bought in foreclosure, and it is an amazing amount of work. You can get a great deal, but you have to realize that you won't get it without a lot of sweat. You have to contact a lot of poeple, and work out a lot of problems. Good luck.

Posted by: guest at March 12, 2008 2:11 PM

Agreed, 2:11 and isn't there a special pre-qualifying step someone has to take to buy a house in foreclosure? You have to have good financials.

Posted by: guest at March 12, 2008 5:13 PM

Sorry for the long post, but it sounds like you are trying to do what we did, and our experiences might be useful to you.

We bought a house we saw on Century 21's website. No broker had been following up or showing the place for months.

The owner put the house on the market, stopped paying his mortgage, and then skipped town. The person who co-signed on the mortgage for him didn't know him well and hadn't spoken to him since his mortgage went through.

Our broker located the bank holding the mortgage, our lawyer approached them, and they did what I think is called a "short sell"; we bought the place for just what was owed to the bank, with no one making a profit on it.

The bank wanted to avoid foreclosure. Once she knew about it, the co-signer on the mortgage wanted to escape the entire thing as quickly as possible (I think she said it had already affected her credit, without her having even known about the default).

The people living in the house had not paid rent for a year, and they saw no reason to start paying once we went into contract. We wanted to live in the house, so we did have to evict them. They had an additional four months paying no rent while we went through the eviction process, then paid us a small amount (because of a Judge's order) for their last two months in the house. So we had to pay both mortgage and rent for six months.

So based on our limited experience, I'd say you should first talk to the owner, if you can. Chances are they know they are in trouble, and if you are sensitive, they might welcome your offer. If you don't want to (or can’t) talk to the owner (who probably has brokers and flippers sending flyers to the house already, asking to buy) you need to find the bank holding the mortgage (a lawyer, could help, and maybe a broker could). I agree that you should get a good lawyer.

We only walked through our place once at night, and the windows were covered with cardboard. We didn't get a good look at it, so we did take a risk. Are you able to do that? Would you be okay with a place in bad cosmetic shape? Once we were talking to the bank they let us send an inspector in - we needed a new roof and appliances and had to repair a rotten floor in one kitchen from where the tenants had let their dishwasher drain onto the floor, but the place is basically in pretty good shape.

We did not need special pre-qualification, but our house was in pre-foreclosure (not foreclosure yet). We got a nice loan the state offered to encourage home ownership for low-income people in low-income areas. Aside from having to evict the former tenants (squatters), delays from matching our loan amount with the value of the house, etc., we were lucky - our purchase of the house was good for us, good for the bank, good for the broker, good for the co-signer of the loan - good for everyone!

I hope you can work things out. Good luck!

Posted by: guest at March 13, 2008 4:27 PM