..Can it be done? I know there are laws in place to protect Maryland homeowners undergoing foreclosure. I have a lead right now with a very motivated seller who is willing to allow us to attempt to buy her home from the bank. Who would I need to align myself with in order to get this deal done, and what is this process like? Thanks!
WALK AWAY! If you're just trying to wholesale they're are waaaaay easier routes to get started. Stay away from banks, we don't like them and they don't like us.
Ask investors at the next Meetup or REIA about this and hopefully those who have worked this niche can share with you. I don't know the specifics but I do know if an owner is more than 30 days behind in payments, a CDPE real estate agent must be involved. I think usually when people call, they are at or after 30 days.
@Christina R. Someone is blowing smoke to you that a CDPE agent Must be involved if someone is more than 30 days late. I've never had a short sale where the borrowers weren't 30 days late. The CDPE group (Charfen) does a great job of marketing themselves, and like to tout special access to lenders, expedited processe, blah blah blah. It means nothing, and banks give no preference whatsoever to one with a CDPE designation, which they get by paying $400 for a 2 day class that is 90% about marketing to distressed homeowners, and 10% on the actual mechanics of a short sale.
I've never wholesale a foreclosure. I have yet to do my first wholesale assignment. One thing I have learned through months of attending meet ups and reias is that Maryland has some of the toughest laws regarding marketing to those in pre foreclosure and serious serious penalties. A lot of which I'm guessing came out of the Baltimore meltdown after the bubble burst mid 2000s. Perhaps some MD agents can chime in with specifics. I'd love to hear from a CDPE one.
Sorry, to the main question. I am assuming it's a short sale since you mentioned the bank. But, you don't buy it from the bank, the owner still owns it. You/ the seller would need to find an experienced short sale agent, list the property, forward the purchase agreement to the bank with the associated bank short sale package completed by the owner, wait for processing and then the bank will order a BPO (a valuation) then negotiate price. Be aware though, the bank is Not going to agree to wholesale price, they are looking for close to FMV, so a short sale is not a great idea for you try and wholesale. If the agent has any brains, they'll talk the owner out of signing a purchase agreement that likely won't be approved, since when it's rejected, they'll be 90-120 days closer to an auction date.
@Christina R. I am a CDPE. Trying to do something other than a straight up short sale is what will get a "buyer" in trouble, ie. sub2, lease option/purchase, etc. you'll need to check for any other mtg.s, liens, judgments, etc. that will need to be negotiated out also, and may affect how the offer is structured.
@Aurelia P. Has the seller already been foreclosed on? If so you can buy it from the bank. If not see Wayne Brooks' posts.
Regarding the Md law to protect homeowners, is/was this an owner occupied property? If not the law does not apply.
Thanks for the responses.
@Ned Carey - They have not yet been foreclosed on. I guess my title should have said PRE-Foreclosure. And it was owner occupied.
@Wayne Brooks - Thanks for the info. When I called back the owner, she kept saying that we needed to talk to the bank...buy the house from them, and that she would sign authorization to allow us to talk to them. I know that she is no longer living in the property by way of eviction or cash for keys, not sure which one. Sounds like this lead is going to best referred to an agent.
Since it was owner occupied stay away. You don't want to inecently get into trouble for helping someone becuase of a stupid and poorley written law.
- thanks for the info on short sales. They seem like a really scary mess here in MD.
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