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Real Estate Agents who let listed home go to Foreclosure auction

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Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:06 AM


What do you folks think about RE agents who have homes listed that are about to go to the Foreclosure auction but don't actively try to sell the property or let their clients know about alternative solutions? I've had several cases where I find homes on the upcoming auction lists (I'm in Texas) and find the home to be listed for sale with an agent. I usually send the owner a letter and contact the agent offering to take over payments, and/or buy the property quickly using "subject to" structuring.

I'm finding that most agents have no idea how to help a family about to lose their house other than traditional sales. It just makes me sad to see these families trying to actively sell their homes only to have an agent who does very little to help them.

I had a case last month where I contacted the agent with basic questions like, what are the monthly payments? how far are they behind on payments? She had no clue and I told her we would make up the back payments, stop the foreclosure and buy the property for the loan balance. She only called me back once and still didn't have any info, b/c she was 'busy.' I explained there was only about a week left before the home went to Foreclosure and she said she knew but then nothing. I know if I had been able to talk to the homeowners directly we probably could have worked something out.

This has happened several times over the past year with various agents and each time, the agent just seems unconcerned that the family is losing the house and will now have a foreclosure on their records. The agents are all just "too busy" to work on any alternative deal. I wonder if it's b/c they think they will lose their commission but geez, you'd think having a home listing that gets foreclosed on with no action by the agent should put some kind of blemish on the agents record.



Wayne Brooks

West Palm Beach, Florida

Jun 06 '13, 07:21 AM


Many short sale listings end up going to foreclosure. Are you talking about properties with equity? Here, about 1 out of 1,000 at the foreclosure auction would have any equity. I understand sub 2's, but if my client is way upside down, I'm not going to recommend them doing a sub 2 with someone, even if I'd get a commission. The reality is it's unlikely the "buyer" is going to hang on long enough to get even, so at some point the deal goes south for my seller. And of course, most buyers looking to do sub 2's on upside down properties are Not looking out for the seller.



Bill G.

Real Estate Investor from Springfield, Missouri

Jun 06 '13, 07:23 AM
1 vote


Probably because the Realtor is aware of who the lender is and the circumstances and knows that some Sub-2, or installment/assumption deal is not going to solve the problem, it takes a cash sale or a short sale or the owner needs to head toward a loan modification. If there are special circumstances, say with a small local lender, other things might be arranged, the Realtor should be aware of that.

They probably seem unconcerned as they are speaking to someone they probably feel like doesn't command knowledge beyond thiers, knowing too that in such short fuse circumstances a payoff is what works, not some further financing arrangement. They probably feel like they are wasting thier time talking about it with a non-cash buyer but are being polite. :)



Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:23 AM


Not short sales, these properties had equity, some were VERY high end homes as well.



Wayne Brooks

West Palm Beach, Florida

Jun 06 '13, 07:34 AM
1 vote


Letting a property with actual equity go to foreclosure auction IS dumb. Usually that's an "unfriendly" divorce.



Dawn Anastasi Verified Moderator

Real Estate Investor from Milwaukee, Wisconsin

Jun 06 '13, 07:35 AM


@Belinda Lopez If you can't get through to the realtor or the realtor ignores you, have you considered talking to the homeowner directly?



Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:41 AM


These were homes where the owner had moved out b/c I did try going to the homes but they were vacant. I asked the agent to let me talk to the owners directly promising that they would not be cut out of their commissions but then nothing, never heard anything back from them. I just wrote them off as dead leads but makes me angry to see these homes then sold at auction to third parties for pennies over the loan balance when the original owners could have gotten some equity back. Isn't a couple hundred or thousand better than a poke in the eye and a foreclosure on your record?



Bill G.

Real Estate Investor from Springfield, Missouri

Jun 06 '13, 07:43 AM


Okay, let's say the Realtor just doesn't care and is ignoring you and you contact the seller........what's you plan?

It's a foreclosure! Are you a certified foreclosure type, with a license to do workouts or are you an attorney? What's your plan? :)



Justin S. Donor

Real Estate Investor from Chandler, Arizona

Jun 06 '13, 07:45 AM
1 vote


Not short sales, these properties had equity, some were VERY high end homes as well.

Just because it is high end does mean it has a lot of equity. I would try to market directly to homeowners rather than go through agents. Agents carry a lot of risk in real estate transactions, and they likely do not want to be apart of a sub2 purchase as it likely violates the mortgage or deed of trust. A sub2 does not relieve of the mortgage debt or monthly payment and there is not guarantee that the sub2 buyer will not walk down the road. It is only delaying the headache.



Medium_rezamp_buscard_whiteJustin S., Rezamp, LLC
E-Mail: [email protected]
Telephone: 4806780446
Website: http://ReZamp.com


Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:45 AM


Here's the numbers on the most recent one: Loan Balance $130k, ARV: $150 - $160. Huge 4-2.5 plus gameroom in a great neighborhood. Agent said the owners had left it mess and wanted them to clean it up before she showed it! I told her we'd take it as-is. Home was only 5 years old! Monthly payments ~$1800 including taxes & insurance.

Sold at foreclosure auction this past Tuesday for $130,59.00 to a cash buyer.



Bill G.

Real Estate Investor from Springfield, Missouri

Jun 06 '13, 07:50 AM
1 vote


You left out the costs to repair...., costs to hold, length of time to be held for sale. Who ever bought may have paid too much. :)



Account Closed

Jun 06 '13, 07:50 AM
1 vote


If there is a sufficient amount of equity, you can just buy the home at the upcoming foreclosure auction. Then, you do not have to deal with any agents.

Make sure to calculate and factor in all the costs on top of the winning bid, including:

- Back Due Property Taxes
- Rehab Costs
- Municipal Liens
- Past Due Utility Bills
- HOA Liens
- Mechanic Liens
- Eviction Costs / Cash for Keys
- Legal Fees
- Court Fees
- Transfer Taxes



Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:52 AM


Originally posted by Bill Gulley:
Okay, let's say the Realtor just doesn't care and is ignoring you and you contact the seller........what's you plan?

It's a foreclosure! Are you a certified foreclosure type, with a license to do workouts or are you an attorney? What's your plan? :)

We work with these type of owners every month, it depends on the situation what we can offer to work out with them. I'm not an agent but direct buyer with a team of other investors who have been doing this for years.

We know exactly what the terms are in the mortgages and deeds of trust and follow all the proper disclosure guidelines and always use a Title company to close.

Being "certified" doesn't really mean anything other than you can pass a test. I know, I write those tests! Results talk and these agents are nothing but blockers on these type situations.



Justin S. Donor

Real Estate Investor from Chandler, Arizona

Jun 06 '13, 07:53 AM
1 vote


Why would you want a monthly payment of $1800 on a loan balance of 130K?



Medium_rezamp_buscard_whiteJustin S., Rezamp, LLC
E-Mail: [email protected]
Telephone: 4806780446
Website: http://ReZamp.com


Patrick L.

Real Estate Investor from Saint Petersburg, Florida

Jun 06 '13, 07:57 AM


Originally posted by Justin S.:
Why would you want a monthly payment of $1800 on a loan balance of 130K?

So you could lose $800/month and hope for appreciation.....because it's 2006.

@Belinda Lopez Your example house sounds like it has no equity at all and isn't a candidate for a rental so you'd need to flip it and nobody will pay the ARV to rehab and flip it. Even in a light rehab $130k is too much to pay for that when you figure all of the other costs associated with flipping a house.



Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 07:57 AM


Originally posted by Tim Breems:
If there is a sufficient amount of equity, you can just buy the home at the upcoming foreclosure auction. Then, you do not have to deal with any agents. . . .

Believe me, we only target a few of these homes a month based on extreme due diligence. In Harris County there are over 4000 homes on the auction block each month, we narrow the list down to just a few with high equity or in select target areas with low DOM and no other liens/issues. The auctions here are crazy, unlike they show on TV, here with that many going on simultaneously, 1st Tuesday of the month is a zoo. Still true that cash buyer's are king here but the best deals are before they get to the auction.



Bill G.

Real Estate Investor from Springfield, Missouri

Jun 06 '13, 08:05 AM


Originally posted by Belinda Lopez:
Being "certified" doesn't really mean anything other than you can pass a test. I know, I write those tests! Results talk and these agents are nothing but blockers on these type situations.

Sorry, it can mean something, it can mean you are in compliance with federal law.

How is it that you "write those tests" what tests? Are you a regulator or with some type of school?

I'd be interested in those certifications and testing... thanks, :)



Belinda Lopez

Real Estate Investor from Galveston, Texas

Jun 06 '13, 08:06 AM


Originally posted by Patrick L.:
Originally posted by Justin S.:
Why would you want a monthly payment of $1800 on a loan balance of 130K?

So you could lose $800/month and hope for appreciation.....because it's 2006.

Belinda Lopez Your example house sounds like it has no equity at all and isn't a candidate for a rental so you'd need to flip it and nobody will pay the ARV to rehab and flip it. Even in a light rehab $130k is too much to pay for that when you figure all of the other costs associated with flipping a house.

Because of the neighborhood. I could have sold this house the same day once it was priced right. They had it listed at $179k. LIke I said, we target certain select neighborhoods and things here are moving fast when priced right. The Subject To is only temporary to stop the auction. House could be refinanced for a lower payment once the foreclosure was stopped. Rents in this area are $1800 - $2400 for a house of that size in that area. Location, location, location.



Justin S. Donor

Real Estate Investor from Chandler, Arizona

Jun 06 '13, 08:10 AM


Rents in this area are $1800 - $2400 for a house of that size in that area. Location, location, location.

You can buy for $130,000 and rent for $1800 to $2400? Every investor and hedge fund in the nation would be on that in a heartbeat. Its not all adding up for me, but if those deal exist they won't be for long.



Medium_rezamp_buscard_whiteJustin S., Rezamp, LLC
E-Mail: [email protected]
Telephone: 4806780446
Website: http://ReZamp.com


Bill G.

Real Estate Investor from Springfield, Missouri

Jun 06 '13, 08:20 AM


Originally posted by Bill Gulley:
Originally posted by @Belinda Lopez:
Being "certified" doesn't really mean anything other than you can pass a test. I know, I write those tests! Results talk and these agents are nothing but blockers on these type situations.

Sorry, it can mean something, it can mean you are in compliance with federal law.

How is it that you "write those tests" what tests? Are you a regulator or with some type of school?

I'd be interested in those certifications and testing... thanks, :)

Belinda Lopez, forum is running pretty fast, probably missed this. :)



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