Pre-Foreclosure Property - Who To Contact?

Question

I have been looking at properties that are in pre-foreclosure, who do I speak with about the property? Do I just contact the home owner and ask if they are willing to sell the property at what they owe to the lender?

Phil Z. · Answer

Seeing how most foreclosure properties are grossly underwater, I would not be looking to purchase properties at what they owe.  You want to purchase at 70-80% of current market value (but you dont tell them that).

You just tell them you want to purchase their property, and it is ok if they owe more than it's worth because you can negotiate a Short Sale with their lien holders.  IF you can get them out of debt, they wont care about much else.

David Sicherman · Answer

Depending on your experience level, forget subject to, it's advanced.

The conversation would be like "Hey I'm a cash buyer, I would like to buy your house, can you tell me a bit about it" let them tell you about the house for a while, talk about life in general. After building some rapport "Ok so I'm interested in the house, how much is left on the mortgage, oh I see, are you a couple months behind, do you know how much?  "  Usually these people if they are responsive at all they would bring it up and you just gently probe.   If they have a good house with equity you can also offer money to help them pack and put down first and last on an apt... remember a lot of these people are losing a place to live, tread gently.

Jassem A. · Answer

if the auction date is pretty close then it may be too late to negotiate with the owner and the bank.  You would need to find out the mortgage company from the owner and talk with them directly.  If it's too late then you can show up to the auction with cash or if it doesn't sell at auction then it will probably become an REO and you would need to negotiate with the asset manager or the realtor they assign to the REO.

Randy Atkinson · Answer

@David Sicherman

David, thanks for the reply. How would the conversation go with the home owner?

Do you just ask if they have any equity in the house?

What does "subject to" mean? Would I just take over title and payments and let them rent from me?

If I would like to outright buy, I should work with short sale attorney?

Randy Atkinson · Answer

@James Simon you can search any of the websites below...

foreclosure.com

zillow.com

realtor.com

James Simon · Answer

@Randy Atkinson How do you find out properties that are in pre-foreclosure ?

David Sicherman · Answer

Contact homeowner and see if it's got any equity.  You can buy it "subject to" if the payments are low and you can rent and make money, you can buy it outright if there's plenty of equity or you can find a good short sale attorney / realtor and buy it via short sale.