La Grange, TX · Member since 2015 · 14 posts · 1 vote
First Time home buyer
Looking at a house that has been foreclosed.
The owner died in Jan
No living relatives
Notice on door says "First Time vacant"
Number listed is a wells fargo. Is this a REO at this point?
Word is that there will be a sheriff sale Sept 1
It is not on the REO website
The paperwork shows loan was 95k in 2012
What stage would this be called?
I guess my question is does it have to go through the process of not selling at Sheriff Sale to become a REO? Should I wait it out, or is it possible to buy before the Sheriff Sale?
I have went to the clerks office and did research I see no liens .. Also I do have financing in place but not cash as of yet..
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
11y
If it's being repossessed and hasn't gone to auction yet, it's not an REO. You can always check on the county website to see who the ownership is (although it takes a week or so to update usually). And as far as REO's go, in every state I'm familiar with, unless it's a deed-in-lieu of foreclosure (seller gives house back to bank), it must go to auction before being repossessed by the bank.
If it's being repossessed and hasn't gone to auction yet, it's not an REO. You can always check on the county website to see who the ownership is (although it takes a week or so to update usually). And as far as REO's go, in every state I'm familiar with, unless it's a deed-in-lieu of foreclosure (seller gives house back to bank), it must go to auction before being repossessed by the bank.
I did check the county website looks like it went from personal ownership to the estate when the owner died in Jan.
Real Estate Investor · Austin, TX · Member since 2015 · 65 posts · 50 votes
11y
Isn't it still in pre-foreclosure? From what I understand, It's technically not foreclosed until it's sold at auction. If it's still in pre-foreclosure, the owner and/or trustee of the estate, not the bank's trustee, can get the loan current and take the property out of foreclosure. You can find the trustee of the estate and work out a deal with the estate to buy the property before the auction.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
Not necessarily, the bank will simply foreclose against the estate, the estate will let it go, and it will go to auction. After that, assuming the bank gets it back at the auction, it will be listed as a REO, at some point.
La Grange, TX · Member since 2015 · 14 posts · 1 vote
11y
I am pretty sure that is what is going on the bank foreclose on the estate...
I heard it is very risky for me to try to buy it at auction, my best bet is to hope the bank ends up with it and lists as a REO? If the bank does end up with it as a REO then do they jack the price up?
I just want to try to get the jump on this, Im not flipping the house or anything I want to live there.
Real Estate Investor · Austin, TX · Member since 2015 · 65 posts · 50 votes
11y
Agreed, if there is no estate (relative/heir) to fight the foreclosure or the estate just let it go then the bank as the lien holder will foreclose and auction it.
Is there a way to bypass this process and get it before auction or before it becomes a Reo..
No, only the owner's estate can bring the loan current and stop the process in its track. You said the deceased owner has no surviving relative so there is no way around it except auction.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
11y
There is no such thing as "no heirs."
What there may be is a situation whereby no close relatives step forward to spend the money and take responsibility to open probate and become appointed as PR.
This may be the case if there is no equity worth chasing, especially since it's going to cost X to complete probate, not counting curing the defaulted mortgage arrearages.
Often the county public administrator (or equivalent) will step in and probate an intestate decedent's estate then liquidate in their our auction.
If I understand it correctly, TX has a stay on foreclosure when a PR has been appointed and foreclosing trustee has been notified.
Here's an analogy: a man parks his car with a loan on the street then dies. Lender wants their money or they will repossess and force sale to liquidate. Not too complicated.
What there may be is a situation whereby no close relatives step forward to spend the money and take responsibility to open probate and become appointed as PR.
This may be the case if there is no equity worth chasing, especially since it's going to cost X to complete probate, not counting curing the defaulted mortgage arrearages.
Often the county public administrator (or equivalent) will step in and probate an intestate decedent's estate then liquidate in their our auction.
If I understand it correctly, TX has a stay on foreclosure when a PR has been appointed and foreclosing trustee has been notified.
Here's an analogy: a man parks his car with a loan on the street then dies. Lender wants their money or they will repossess and force sale to liquidate. Not too complicated.
sounds like I just need to wait for the auction or wait for it to go REO..... from what I been hearing the auction route is risky? I have financing, just dont know if I can get cash to walk up the sale with... If it goes REO they are prob going to jack up the price?
I wouldn't worry so much about them jacking up the price after the auction. At the auction, the bank can bid up to the full value of the outstanding mortgage balance without spending any of their money. If no one else is bidding, it means the auction value is something less than the mortgage value. After the foreclosure auction, it becomes an REO and while they may try to sell it for more than the foreclosure amount, the market will still determine if that is possible Because foreclosures can happen so quickly in Texas, it may be easier for the bank to just automatically bid the balance at the auction and then decide how they want to deal with the property later.
Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
11y
go to the auction and watch anyway. If no one bids on it or if it doesn't get to the amount owed then the auctioneer will probably say "back to the bank for xxxxxx". The bank then essentially buys the title for that amount. Once they have title they can choose to sell it for whatever they want.
Also I'm not sure such website you use but the official way to determine in texas is to go to the county court house and find where they are posted. Some websites compile this information but might not be complete. Auction.com only has the properties for which they are the trustee for...about %50 of the properties each month. Hope this helps.
Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
11y
fyi. I've never seen someone from a bank come bid up their own property. But the bank allways has an amount set that bidders will have to go over to win it. Usually on par with the remaining mortgage plus maybe some legal fees....not sure if they can artificially increase this amount.
go to the auction and watch anyway. If no one bids on it or if it doesn't get to the amount owed then the auctioneer will probably say "back to the bank for xxxxxx". The bank then essentially buys the title for that amount. Once they have title they can choose to sell it for whatever they want.
Also I'm not sure such website you use but the official way to determine in texas is to go to the county court house and find where they are posted. Some websites compile this information but might not be complete. Auction.com only has the properties for which they are the trustee for...about %50 of the properties each month. Hope this helps.
I think that is what is going to happen, i live in a small small town, the owed amount is about 85k and the house appraisal value is 97k on the tax roll. Is it a fast process, if it goes back to the bank, do they turn and burn quickly to get it off their hands? or could it drag on for months before they post REO? I mean I would even try to talk to the bank rep if he is there at the auction afterwards..
Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
11y
It just depends. I just noticed one in my neighborhood from the February auction and it was listed on the mls around July for about the same it was going for at the auction... But I would bet someone could now negotiate 5-10% down. That's the only one I've noticed but I don't particularly watch for them to get listed.
Also, I highly doubt you will see anyone from the bank there. Which bank is it? I think you mentioned wells fargo? If it's a small local bank you might have some luck getting some info from them...but probably not wells Fargo.
As far as the tax appraisal, I've noticed in my county it usually trails the value by between 20 to 50k. But they don't account for property condition. And also starting this year it seams the counties here are trying to close that difference. I'd get a realtors opinion. If not try redfin.com . They have a way to get a ball park value that is slightly better than zillow, trulia, ect.
how do you know the owed amount? That's not generally public information. What is public is the original note amount, date it was created, and length of note. From there you can kind of get an idea of the remaining balance.
Good deal. With those numbers, i would wait for the property to become an REO. Not enough equity to buy without seeing the inside. I'm relatively new but if you have any more questions I'm happy to help.
Good deal. With those numbers, i would wait for the property to become an REO. Not enough equity to buy without seeing the inside. I'm relatively new but if you have any more questions I'm happy to help.
well the court house sale has come and gone... I called the trustee the day before and as I figured the sale was cancelled like every other one here in the past. The sale was sept 1st, so from what I know it now is suppose to go back to the lender which is wells fargo... Is there a time frame on which this is suppose to happen? I have called pretty much every day since the 1st, wells fargo gives me a the same lame answer of "its still in the home owners name" which the home owner died in Jan 15. Does this just leave me waiting or is there more I can do? whats my next step?
If the foreclosure was cancelled then the bank dues not own it yet necessarily. Most likely the heirs could have worked out an agreement to give then a few more months to sell or pay up. Or the heirs could have deeded it over to the bank. Its a long shot but i would start by finding who inherited it, who the executor is, and try to contact them...direct mail, phone call, ect. You might see this property back on the foreclosed list in a month or two also.