I am currently tossing around trying to purchase properties through foreclosure auctions at the county. I am looking for opinions and feedback regarding connecting with homeowner POST auction as they still will live in the residence shortly afterwards. I am well aware of the risks involved in buying at an auction and also of the idea of connecting with people before their house is auctioned.
My general idea was if I win a house at auction, to go to the residence (still have previous homeowners there), try to connect with them in what is a kinda awkward situation and see if me paying them say 1000 dollars and paying for professional movers to move them in exchange for them not intentionally damaging the place makes sense. Is this a bad idea? I don't think it's unethical cause it would help them. I'm more worried if I'm doing anything illegal or barking up the wrong tree.
You mentioned you know the risks of contacting them, then you asked if it was legal.
I assume you aren't aware that soliciting pre foreclosure folks without a Realtor's license, a HUD certified credit counselor's license or being an attorney can take you to $100,000.00 in fines and/or 10 years in a federal slammer.
Pass the perceived temptations as most don't have enough equity worth the trouble, much less the risks that your dealings can delay a lender's actions, putting you at greater risk if you can't really buy the place yourself as a cash or conventional deal......IMO, newbies need to walk off from the idea. Good luck :)
@Bill Gulley :
I meant contacting them after the auction has taken place. So the homeowners are still in the residence. Is this still considered pre-foreclosure? I've done alot of diligence about pitfalls in the purchase and realize that 90%+ at least in the counties that I look at are not worth more than a glance but I have noticed enough investors winning certain auctions at great discounts at least on the surface. I obviously didnt do my own title search on those properties cause I'm just looking at records so not sure how good of a deal they really turned out to be.
Ahhh, search on BP, for "cash for keys" after the sale that's different, sure, you can pay them to get out, I never did. :)
here it generally takes 60-90 days after the auction to get possession of the property. In my head i think pre-auction =preforeclosure but the process hasn't completed. I guess i was unclear if the rules were the same for both periods regarding contacting an owner
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.