Wholesaling A Pre-Foreclosed Home

14 Replies

Hi Everyone,

So my question to the community is, if a home is in pre-foreclosure status and is up for auction, yet I speak with the homeowner before it gets auctioned off, can I get this house under contract and wholesale it to an endbuyer?

Hi @Barbara Gardner , you should double check with a local real estate attorney to confirm it, but you can definitely get a house under contract. Depending on your state laws regarding foreclosure, you may have to adjourn the sale date or hire an attorney to file a motion to defend the action. Are you looking to actually close on the house? 

Originally posted by @Dan Barli :

Hi @Barbara Gardner , you should double check with a local real estate attorney to confirm it, but you can definitely get a house under contract. Depending on your state laws regarding foreclosure, you may have to adjourn the sale date or hire an attorney to file a motion to defend the action. Are you looking to actually close on the house? 

 for those that do not close on houses IE wholesaler contract flippers I cant think of something worse for the seller.. the seller gets in many cases lied to thinking they have a sale and when the wholesaler walks they lose their house.

seen it happen over and over  when i buy court houses steps properties show up and have to give the bad news to the owner, who then tells me there sad story of letting some unlicensed wholesaler tie it up and then just walk and lose the house..  

this is VERY VERY risky for sellers..  all those foreclosure rescue schemes have been pretty much put out of business by states AG's

I agree 100% with @Jay Hinrichs on this. There is nothing worse for the seller, whose hopes got up with a contract and preventing foreclosure, only to have a non-serious buyer walk away.

If you are not intending on actually closing on the home, then I would not suggest you go down this road. If you are going to close and then double-close it or hold and then close it later, that's fine. But I do not recommend that you tie up a property that you have no intention of closing on.

Totally doable. Make sure its a good enough deal that you can either move it or are willing to close on it so that you do not leave the seller hanging.. Follow your state guidelines on contracts for preforeclosures and all the rules.. very important. Spend a few hundred and get a local attorney to review or draft it up. Again, make sure its a deal and you can move it before dragging them along! 

@Dan Barli @Jay Hinrichs My EXACT intention is to get the house under contract, and assign it to an endbuyer. The locations I see the pre foreclosures in are areas where I have endbuyers buying properties quite frequently. So, no i'm not just trying to waste anyones time. Especially my own. I am not going to speak with a seller and lie to them having them think that I am the buyer. I openly communicate with any motivated seller I speak with and let them know that I am only getting the house under contract so that there is no confusion. I do appreciate the advice and will tread lightly. I would hate for a homeowner to be disappointed because I mislead them. 

@Kyle Doney Thanks for the advice! I definitely like to make sure all the necessary steps and actions are in place before I do any deal, so getting an attorney to look over things and to speak with sounds like the most logical thing to do before stepping into this arena. I appreciate that advice. 

Originally posted by @Barbara Gardner :

@Dan Barli @Jay Hinrichs My EXACT intention is to get the house under contract, and assign it to an endbuyer. The locations I see the pre foreclosures in are areas where I have endbuyers buying properties quite frequently. So, no i'm not just trying to waste anyones time. Especially my own. I am not going to speak with a seller and lie to them having them think that I am the buyer. I openly communicate with any motivated seller I speak with and let them know that I am only getting the house under contract so that there is no confusion. I do appreciate the advice and will tread lightly. I would hate for a homeowner to be disappointed because I mislead them. 

 the main issue with this is if you don't personally have the funds to buy or cure the default .. and your buyers which you really have no control over don't come through .. the seller gets damaged big time.  if its not in foreclosure that's another kettle of fish all together.