Investor · Blythewood, SC · Member since 2015 · 16 posts · 0 votes
We have a motivated seller who is willing to do a Subject To deal - amazing. The problem is that he wants 12K cash to settle a lien, placed by a bank, on a separate property that he lost to foreclosure.
The seller will allow me to contact the lien holder (Bank) and settle the lien.
Here is my question:
1. What do I need in order to act on behalf of the seller with matters pertaining to this lien?
Wholesaler · Culver City, CA · Member since 2015 · 185 posts · 56 votes
11y
@Joeny Ortiz In order for the bank to talk to you, your seller will need to provide the bank with an authorization to release information to you. Otherwise, the bank will not talk to you at all. Make sense?
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Joeny Ortiz, Usually the Sub-to relates to the actual property being bought, but, as long as your calculation of $12k plus whatever they want for the property you are buying still rates as a smokin' deal, then why not? It shouldn't be too difficult to make sure that your Offer is conditional to the Bank settling any Liens on BOTH properties on closing. [Not legal advice]. All the best...
Investor · Blythewood, SC · Member since 2015 · 16 posts · 0 votes
11y
@Brent Coombs do you think its possible to negotiate with the lien holder for a reduced settlement on the amount owed? The deal looks good, even with the 12K payout towards the lien, but I want a great deal.
Wholesaler · Culver City, CA · Member since 2015 · 185 posts · 56 votes
11y
@Joeny Ortiz In order for the bank to talk to you, your seller will need to provide the bank with an authorization to release information to you. Otherwise, the bank will not talk to you at all. Make sense?
@Brent Coombs do you think its possible to negotiate with the lien holder for a reduced settlement on the amount owed? The deal looks good, even with the 12K payout towards the lien, but I want a great deal.
Hmmm. Does the Lien Holder also control the property you are trying to buy (as a linked Sub-to), or is it just the Seller trying to make that link? Either way, I believe your Offer should only reflect the amount that is still a "great deal" for you. Remember, you can just walk away if you don't like the Seller's bottom line.
Of course, if your "great deal" still allows you to allocate to the Lien Holder their full $12k (but lessens your net Offer to the Seller by more than $12k), perhaps you could THEN negotiate with the Lien Holder to lessen what they would take to settle ie. two bites of the cherry! Cheers...
PS. You first indicated that the Lien was $12k, but then you said "12K payout TOWARDS the lien", so does that mean it is actually MORE than a $12k sub-to?
We have a motivated seller who is willing to do a Subject To deal - amazing. The problem is that he wants 12K cash to settle a lien, placed by a bank, on a separate property that he lost to foreclosure.
The seller will allow me to contact the lien holder (Bank) and settle the lien.
Here is my question:
1. What do I need in order to act on behalf of the seller with matters pertaining to this lien?
2. Will a bank reduce the amount of the lien?
Thanks,
Joe
Get an authorization letter executed by the seller, if possible have the letter notorized. With this letter the bank should be willing and able to communicate with you.
As for the discount on the lien, you might create a situation where you are helping out your "friend" and insinuate through the conversation your "friend" is trying to avoid bankruptcy (which would wipe out their lien) if this lien along with "other" financial obligations can't get resolved. Followed this with an offer of say 25 cents on the dollar.
You won't know what the bank will do until you ask. So ask!