All Forum Posts by: Mitch Freed

Well yea that was kind of my question..I know that you can purchase an option from a homeowner who doesn't have a listing agent. Therefore securing your interest in the home while negotiating with the lenders...the homeowner can't sell to anybody else during the terms of the option agreement.

I'm just unsure if you can make the same kind of deal with the homeowner while the house is listed on the market.

EXAMPLE:

Home is listed with a realtor. Auction is 2 months away. Borrower owes 270K. Asking price is 290K. The homeowner basically knows he isn't going to make any money and all he wants is to avoid a foreclosure on his record.

The homeowner has agreed to sign a release form allowing me to negotiate with his lenders.

To protect my interest in the home while negotiating I know I can purchase an option from the homeowner, for say $10.00, to purchase the home at a price the lender and I agree on.

Since the listing won't expire before the auction date...does the option agreement which binds the homeowner to sell me the home conflict with the contract he has with the agent? In other words, the agent has an obligation to keep the home on the market as an active listing..if they receive an offer while I am negotiating that satisfies the full amount due on the loan...can they accept? Or would this be considered a backup offer if my negotiations fail?

Thanks in advance!

Mitch

I like the first option. Buy their next home and rent out the current. Generate a cash flow from the current house...you didn't mention the size but it sounds like the monthly rent would cover the PITI. Who would receive the rental income...you or your grandparents? Or would you manage the rental and charge a small fee?

However, instead of them renting from you on the new house, you set up a lease option. That way they have an equitable interest in the home and don't have to worry about getting financing until a year or 2 years from now...depending on the terms of the agreement. You set the purchase price of the home at the inception of the agreement.

That is one option. your thoughts?

With the auction date so close I would fax the lender the written offer (signed and accepted by both parties) along with a proof of funds (all cash at closing I think you said)...shows them you are serious and can close quickly. That will reinforce your request for a postponement.

Ok..we need to get some clarification on terms here.

When you purchase a property in "pre-foreclosure" you are simply writing an offer to the homeowner...the bank does not yet own the home. There is no redemption period. You may be negotiating a short sale with the bank...but you are still writing the offer to the homeowner.

If the bank forecloses on the home and a "Trustee Sale" occurs, there is no redemption period in California. This is a non-judicial foreclosure, hence no redemption period.

If a judicial foreclosure occurs then the homeowner has 111 days (or more) to redeem the house. They will have to come up with 100% of what is fully owed to the lenders plus arreages, plus fees etc...

Check this link out...it will clarify your questions regarding CA foreclosure law...for anything further or more detailed regarding the law..I would recommend an attorney to assist you.

http://www.foreclosures.com/www/pages/state_laws2.asp?state=CA

Hope that helps.

Thank you for your responses!

One question I have regarding the BK process is how it affects an ongoing short sale negotiation.

For example...if I am currently negotiating with a lender and the homeowner files Chapter 7. How does that affect my progress with the bank? Is everything put on hold while the foreclosing lender requests the "relief from stay?" And if the BK goes through then I assume negotiations are over.

Thanks in advance!

Mitch

Another way to get her some money is to purchase items from her after the sale of the home. Just write up a bill of sale for things like tv's, furniture, etc...

Just make sure anything like this is done outside of closing...just to be safe.

You may want to try to make friends with somebody in a collection agency..or if you have a friend of a friend who works for one...they can pretty much find anybody and may be willing to do you a favor.

Either that or you can hire a PI to track them down...not sure the cost involved there, but could be less than going through a foreclosure.

Mitch

I believe there are companies out there that handle short sale negotiations (organizing all the paperwork, negotiating, etc..) for investors like yourself.

Check out a Thread in this forum called "Short Sale Processing Company" that may answer some of your questions or point you in the right direction.

I agree..you could get an unbelievable deal right now in Bend...their market has taken quite the hit and prices have really dropped.

Other great areas are Dufur, OR and Maupin, OR. If you like skiing, flyfishing, whitewater rafting, golfing, and all that, then Oregon is the place to have a vacation home.

But don't tell too many people...if it gets too crowded you will spook all my fish haha.

I am also not a realtor and have nothing to sell!