Hello there. Just wanted to know how to handle a situation I got myself into. I am from outside of Philadelphia Pa, and have been trying to break into the foreclosure market, and now have had some luck.
Here is the situation. A fellow responded to my letter, and I met with him at his house. It is a nice townhouse in a decent school district. The town houses all comped at $180-$205 in this complex within the last 8 months.(I have access to TRENDMLS) so I did my homework. Anyway, I met with him and he tells me he owes $102k on the house, and might have to sell it.(It goes to the Sherriff sale on Feb 28, 2007.) Anyway, I had my title guy at the courthouse do the title search and turns up he owes $132k. That is okay, I really don't care if he fibbs to me, because I am able to uncover the truth with a phone call.
Anyway, I looked the place over, and it is well kept. I have the money to purchase the place, and even was gonna offer him 5k cash upon settlement to make sure he has a place for he and his family to go. I figure if I am into it for 140k-145 and all it needs is paint and carpet, it is a great deal, at least I think so.
Anyway, the problem is he now has a sale lady from Century 21 coming over Friday night, and she told him she can get it pulled from the sale, and sell his house for about 200k.
Now the part I am not sure of is HOW can she stop the foreclosure?? I mean, she has no money, all she is is some rep from Century 21. She isn't even a broker. Also, they are meeting Friday night to talk this over, ect. The banks aren't open on the weekend, and Monday is a holiday, so that leaves her with 7 days to sell this house, and settle, in a slow market where the house 1 block up has been listed for 43 days now. Do you follow me?? Is this possible?? I mean, I am sure it could be sold, but I highly doubt it, but I was more concerned with how she is gonna stop the sale without a buyers agreement.. Do they just take her word??
After all that, I guess the question I have is, once someone agrees to sell me thier property before the sale, HOW to I put a stop to it. My partner is a realtor, and he has the buyers agreement, and I have the cash to do the deals, but when your down to the last hours, is there a way to remove it from the sale with out having to rely on the owners(Who often act like idiots with no sense.) I mean, these people are not even sure who thier lender is, none the less are they able to explain to them that someone is here with a buyers agreement, a certified check, and able to have title ins. in 1/2 hour.
ANY ADVICE WOULD BE VERY HELPFUL. Thanks, Chris
Sometimes lenders will delay the sale if a realtor gets a listing agreement and talks them into it. In this case it sounds like there is equity so the bank may be interested in giving the realtor a couple weeks to try and sell.
The same goes for a buyer with a purchase agreement. If you can get the lender to talk to you (takes a loan authorization from owner) and time. Lenders want the loan autorization and then may talk to you after 48 hours of receiving it. If you show them a purchase agreement and the fact that you can close quickly, they may delay the sale. Then again, they may not. It will depend on the lender.
If you already have the seller in a legally binding contract, you have no concerns. If you do not, I would point out to him that no matter what a realtor says they can do - fact is it will take time to sell the house and they are always overly optimistic on price. They will have to market the house (time), find a buyer (time), settle on a price (time) it is a slow market (time) and the seller will have to produce the loan (time). A traditional lender needs roughly a month to bring a loan to closing. Also traditional buyers have contingencies. They may want credits or repairs made. If the guy is losing his house, he doesn't have the money for repairs. Banks are notoriously stubborn. I dont believe they will agree to hold off on foreclosure (which costs the bank big bucks, especially when it goes on for a long time) just because the seller has signed up with a realtor. They may if he has a signed purchase contract and a soon closing date.
I would try to reason with him with those issues. If he doesn't budge, take it as a lesson learned. ..Once you get them in agreement - PUT THEM UNDER CONTRACT!