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Can I buy the house from owner at discount before forclosure

By KgK one following x   2012 Sep 12, 10:58am 7,709 views   16 comments   watch   nsfw   quote     share    


Single home in this neighborhood is ~320K
someone is being forclosed with loan of 240K. Can I pay the owner 240K and buy it. or is this illegal?

How do you suggest I go about doing this?

1   PockyClipsNow   ignore (0)   2012 Sep 12, 7:54am   ↑ like (1)   ↓ dislike (0)   quote   flag        

find a realtor to convince them to list it as a short sale

buy it from the bank. you cannot buy it from the underwater loan owner without them AND THE BANK(S) holding the notes to agree to the price.

2   LarryPatrickMaloney   ignore (0)   2012 Sep 12, 10:55am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Of course it's legal! :)

You don't need a realtor.

You can do one of two things.

#1.) Assume the loan for no cash exchange. Debt goes from home owner to you.

#2.) Buy the house from the owner directly. Don't need a realtard, but make sure you get a lawyer to handle the contacts, documents and closing. YOU do the closing.

Note: There might be fees and prior debt payments you will either need to cover or convince the bank to waive.

3   Raw   ignore (0)   2012 Sep 12, 10:59am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Why would he be willing to sell to you without getting anything?

4   someone else   ignore (0)   2012 Sep 12, 11:01am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Yes, you definitely don't need a realtor.

But you need the bank to agree, and the BANK gets the money, not the owner. The owner is toast. Owner gets nothing when bank forecloses.

5   Raw   ignore (0)   2012 Sep 12, 11:45am   ↑ like (0)   ↓ dislike (0)   quote   flag        

robertoaribas says

larry you are clueless. If the owner only owed 240K and the home is worth 320K he'd sell it and keep the difference... Obviously, there is more owed such as a second or something...

Nice analysis!

6   mike2   ignore (0)   2012 Sep 12, 6:19pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

To Larry Patrick Mahoney: Assume the loan? Oh really? Like it is just that easy Larry? Do you know what is involved in "assuming" a loan? Have you ever assumed a loan? And some guy is going to sell his house to you for $240k if it is worth $320K? Oh yea, everyone is going to lose $80k so this buyer can get a great deal..

Then you advise him to get a lawyer instead of a Realtor? Real smart there Larry..like Lawyers are going to save him money and then you say do your own Closing? Then at the end you tell him to "CONVINCE" the bank to waive its fees and other cost and debts. Oh Yea, He will just convince then bc he wants the house and the banks are so Nice they will waive the magic wand and give him the house $80k less than it is worth! PLEEEEZ.

Roberto Aribas is the only guy on these comments that has a brain and a clue about Real Estate.You guys should be renting from him.

So Larry? Is the seller getting anything from the buyer in your analysis or will he just give him the house and walk away bc he WANTS it? How about this scenario... The Buyer says F... all you guys, My house is worth a lot less than I owe on it and I haven't made a pyment in over a year and then I will get a Lawyer and pay him to file some papers to stall the foreclosure another year and I will stay here until the sheriff comes and throws me out then the bank gives me $10k-$20k for cash for keys? So I get to stay in my house 2 years w out making a payment and get $$20k to move from the bank.

Then the Bank will give the listing to an REO agent and sell it for market value. All you guys who advise against buying any real Estate bc it is "Cheaper" to rent will still be renting and some investor will buy it and fix itup and make a ton of Money renting to you dooms dayers for the next 20 years?

That is the real scenario.

7   37108605   ignore (0)   2012 Sep 12, 9:32pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

LarryPatrickMaloney says

Of course it's legal! :)

You don't need a realtor.

You can do one of two things.

#1.) Assume the loan for no cash exchange. Debt goes from home owner to you.

#2.) Buy the house from the owner directly. Don't need a realtard, but make sure you get a lawyer to handle the contacts, documents and closing. YOU do the closing.

Note: There might be fees and prior debt payments you will either need to cover or convince the bank to waive.

Wow! I am thankful you aren't my advisor.

8   pkennedy   ignore (0)   2012 Sep 13, 2:47am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Friend and then email "e-man" on here, he'll have the best suggestions for you. You could do it without a realtor, but you'll fail. Others on here are suggesting you do it without a realtor, but of course they've never tried it. You need someone who can actually push the whole thing through, and they might be able to negotiate with the bank and get a lower price even. There is a tight time line and if you're not ready at every turn, you'll likely loose the property to an auction.

9   Entitlemented   ignore (0)   2012 Sep 13, 3:21am   ↑ like (1)   ↓ dislike (1)   quote   flag        

Larry,

You are right, we should be able to assume a loan.

In fact Larry should be made head of FHA.

We could solve this crisis and get back to 20% down and 28% of housing debt.

Have FHA allow loan assumption. If there is a 2nd loan or back fines / taxes on house, have the banks/buyer/selling sign a disclosure agreement. The idea is that you pool the costs of past fines / back unpaid taxes to have Bank / Buyer / Seller each pay 33% of the losses. In this way if the country and the bank make a good faith disclosure, then the problem can be solved without FHA / HAMP / CRA-like intervention.

Which puts us back to the original question: Why did we reduce the required down payment to 3.5% from 20% to begin with?
Why did we create funny money loans to begin with?

10   PockyClipsNow   ignore (0)   2012 Sep 13, 3:36am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Yeah the advice on this board has gone down hill.

You HAVE TO USE A REALTOR IN THIS CASE you tards.

Why? The seller is underwater. The bank will NOT approve a short sale without a licensed realtor putting it on the MLS (even though its on the mls for zero time and he puts in in the MLS as a pending sale that is what has to happen.)

Thus logically: only a realtor can put it in the MLS. So you need a realtor.

Assume a loan? wtf? I think only FHA are assumable and who the hell would assume an underwater loan?!?! its a joke.

I'm always surprised at the ignorance here on this board. Even at patrick who is STILL TOO LAZY to actually participate in the RE biz and learn how it works mechanically and legally because he is 'anti salesmen/anti commission'. (patrick im pretty sure you woudnt go to hell if you spent 6 months pretending to be an agent and actually sitting open houses and showing homes - you got a lot to learn man.)

Its true that half the board here should be renting from roberto! hahaha

11   gdog   ignore (0)   2012 Sep 13, 4:21am   ↑ like (1)   ↓ dislike (0)   quote   flag        

I ended-up with more houses than I could handle by offering "$100 for your deed". ...Just make sure the loan you take-over doesn't put you under-water.

12   ELC   ignore (0)   2012 Sep 13, 10:22am   ↑ like (1)   ↓ dislike (0)   quote   flag        

PockyClipsNow says

Even at patrick who is STILL TOO LAZY to actually participate in the RE biz and learn how it works mechanically and legally because he is 'anti salesmen/anti commission'.

He dreams the impossible dream. I began working for a FSBO franchise called BuyOwner.com because they presented themselves as hating Realtors and wanting to put them out of business. It turned out they also were brokers but ran it under a different name. They even paid our RE school and licensing so we could have the option of listing them in the MLS as well as their FSBO system.

There's no getting around that the MLS works far better than any FSBO system yet to be devised. BuyOwner's system was pretty good but most listings would sell through the MLS even though we usually listed them at a 6% discount in the FSBO system.

If someone was willing to invest the money it took to advertise maybe it could work. Our office spent over a million a year in TV, billboard, catalog and classified advertising and still couldn't match the MLS's peformance.

Over a thousand transactions with BuyOwner has conviced me beyond a shadow of a doubt that you are seriously hurting yourself if you don't use the MLS. List it with a flat rate company if you must but there's no getting around paying the 3% and dealing with mostly unprofessional agents. That's how good the MLS is. Even mutants and the inbred can make it in this business.

13   ELC   ignore (0)   2012 Sep 13, 11:20am   ↑ like (0)   ↓ dislike (0)   quote   flag        

PockyClipsNow says

Even at patrick who is STILL TOO LAZY to actually participate in the RE biz and learn how it works

Let's first try to get him to pick his own links. :)

14   LarryPatrickMaloney   ignore (0)   2012 Sep 13, 4:05pm   ↑ like (0)   ↓ dislike (0)   quote   flag        


Yes, you definitely don't need a realtor.

But you need the bank to agree, and the BANK gets the money, not the owner. The owner is toast. Owner gets nothing when bank forecloses.

Hmmm, no I don't think so Patrick.

If the house is "pre" foreclosure (hasn't been sold at auction) the homeowner (mortgage debtor) can freely sell the house to whomever they like. Bank approval isn't required.

If the new buyer gets a loan (or cash) for the amount owed on the house (plus the back payments) The new owner pays the old owner at closing, and the old owner pays the bank. Done and done.

Am I missing something?

-Larry

15   LarryPatrickMaloney   ignore (0)   2012 Sep 13, 4:16pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Wow, such a heated topic here! A bit puzzling at the hostility. Thanks for the support from a few follow posters.

"Mike2" I suggest you read ptieman's follow up.

Also, FHA/HUD aren't the only loans that can be assumed. It all depends on the contracts. Assumption was a popular way in the 70's and 80's for owners to get out of house debt without defaulting.

Just read up an on mortgage assumptions and you will learn about it.

16   pkennedy   ignore (0)   2012 Sep 13, 5:03pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

I would get the house appraised first, and find out why it is getting foreclosed upon, and why the owner isn't selling for the price you are quoting.

@Larry, you're correct that if it's not a short sale, the bank wouldn't need to get involved, I figured the guy was over estimating to start with, and it was likely under water regardless.


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