I have a super-motivated seller but he says the house is in foreclose. I asked if he got a Notice of Default or Trustee Sale and he said yes. It's listed on Auction.com; that means the bank took possession so he can no longer sell the house right? So this is a dead lead I assume. Please advise.
Auction.com advertises and conducts two different kinds of auctions: 1) REO auctions where the bank already owns the property and 2) actual foreclosure/trustee auctions where they act as the foreclosure trustee. You need to determine which this is.
If the owner still has deed to the property, then it is a foreclosure auction, not REO.
There is still time, though you have to move quick. The owner cannot negotiate a sale. You can negotiate a short sale with the lender, but only with the owner's permission. You could do this part on your own, however, given the tight timeline and the fact that all the steps must be completed quickly and accurately, I would recommend you find a realtor who is an expert in short sales in your area. They'll take a cut, but you're more likely to get the deal done if you have someone doing all the right paperwork at the right time.
As Jonathan Towell says, the realtor will get a cut in the deal. But most lenders want a realtor involved so the property is listed on the mls to get the most exposure/highest possible offer.
There is equity in the house and I can pay cash if I need to so this wouldn't be a short sale. I think I can just pay off the mortgage (or even better pay the back-payments and buy it sub-to?).
I thought that since it's going to auction then the bank owns it, not the seller - that was was gave me pause... but it sounds like maybe I have a chance. I will try to get it under contract today. If I can get it under contract for the right price what would be my next step?
Title search, talk to an attorney. If you thought the bank owned it, during the foreclosure process, you may be missing other things. There will be some date at which the bank is not required to accept just the arrears, but can require full pay off.
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