I've never been to foreclosure auction?
Wondering if it works like a regular auction where you can just keep on incrementing your bids or do they make them sealed bids?
Originally Posted by August West
I've never been to foreclosure auction?
Wondering if it works like a regular auction where you can just keep on incrementing your bids or do they make them sealed bids?
Good question. I've never bought a home through auction. My girlfriend works for an investor so I hear much of what happens. I can tell you this. They've been doing it for a long time and they still struggle. If you have access to the home then so does everyone else, which reduces risk but drives the price up. If no one has access to the house and you by it on hope and luck, that keeps the price down but it's risky. I really don't know what to say other than be careful.
Personal loan (from a bank, credit union, etc.).
This is what my former neighbor did. She got a personal loan, bought the pre-foreclosure condo from the owner (paying off his debt and taking over the payments) which she negotiated with a real-estate attorney helping her, then once the sale closed (we are a escrow not a contract purchase state), she refinanced with a regular mortgage broker finding her a decent mortgage.
(KLD)
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I've done it four times in my life, none recently. It used to be called loan assumption. I even used a credit card to scare up the cash since there was no credit check. The bank just wanted money and in case of default, the original purchaser was destined to take the hit, which happened in one of the houses. I don't know if it still works that way.
I have had periodic paralysis all my life. I lost my ability to walk in 2011 beginning with a spinal block, which was used for a hip fracture caused by periodic paralysis.
Hard money lenders lend for short terms at higher interest rates. They like to work with investors. I don't know if they will work with home buyers. They can be found on Google and through real estate agents. You may want to find a conventional loan if you can because of the lower interest rate. Conventional loans require a longer and more complicated process. This situation will only complicate it more. They will probably balk at your situation. But it's worth a shot. Worst thing that can happen is they say no. It won't cost you anything to find out. Look for a zero cost loan. I just closed a zero cost 5/5 Adjustable Rate Mortgage loan at 3.5%. Stays fixed at 3.5% for 5 years and adjusts only once every 5 years after that (vs most ARMs that adjust annually). Best deal out there today if you plan to pay off soon or move soon. Otherwise, if you plan to stay in there forever, a fixed rate mortgage may serve you better.
Last edited by August West; 06-22-2018 at 09:27 PM.
The house might be totally ok, are you talking about appearance? Is there a well or septic system? Hard wired smoke alarms? Buried heating oil tanks? Lead paint? Mold? Termite damage? I could go on until the cows come home. You need to go into these kind of deals with eyes wide open.
Real estate attorney as in one that is all the do. Not one that does divorces, wills and other stuff. I've never bought at auction, just a foreclosure. Become very familiar with the term "due diligence."
NW-Will
I posted on the thread 'Recent Accident to My Son' what we went through when were purchased a condo in Baltimore. The owner was in the process of filing for Bankruptcy and Bank of America had the first and second mortgages. We made a full price offer for the property in Sept 2009 and eventually closed on the property in Feb 2012. This was right in the height of the real estate melt down. Bank of America was in totally confusion.
We were informed on two different occasions that the condo was going to be put up for auction. On both occasions the property was pulled from the auction on the day of the scheduled auction because BofA had a problem with the title. I was told my the attorney that was handling the foreclosure that BofA would bid the mortgage amount at the auction to get clear title to the property so they could sell it. At that time the BofA mortgages totaled $518,000 and the property's appraised value was $280,000. Fortunately the auction never occurred and we were eventually able to complete a short sale from the owner. This was a 2-1/2 year process which is crazy for a real estate purchase. During that time I think that I talked to someone almost everyday about the purchase. It was either the BofA or the listing real estate broker, who I became friends with.
We were motivated buyers because we decided that we had to have this particular condo. My son, who is injured, was attending Johns Hopkins medical school at the time. The condo is accessible and is located two miles from the medical school. Finding any property in Baltimore that's accessible is difficult, much less located close to the medical school, that's why we were determined to make this purchase happen. The critical element was finding a realtor who shared our determination to make the purchase happen. Even, at the last moment the short sale looked like it might fall through until the realtor contacted the owner and persuaded the seller to sign the final documents. I can't post online what he did but if you send me a private message I can share it with you. It was not a big deal but it motivated the seller. I would be concerned about hiring an attorney because of the cost. If we had been paying an attorney during the 2-1/2 years it took to complete the condo purchase, I can't imagine how much that would have costed.
My son graduated from JHM and is working in Baltimore so he's still living in the condo. I'm in Baltimore for the weekend so I'm writing this post from the condo.
Roger
If you need to borrow 4-5 figures, then a personal loan may be a viable option. But if you need to borrow 6 figures, a personal loan is probably not an option. But the same strategy applies: 1) purchase the home with a high interest rate short term loan, and 2) after the close, refinance with a low interest rate long term loan.
Last edited by August West; 06-24-2018 at 03:02 PM.
Thank you for all the great info.... Still trying to read up on the finance stuff!
and be better prepared for the right opportunity.
UPDATE :
I put a letter together and went by to leave it in the mail box.
Gave the doorbell one last try, and she was in and answered ! She'd just got back from the hospital, said she had been in the hospital for a week. Had a nice chat. She said she has an attorney and is sorting the situation out! Also she is getting hammered with phone calls and notes being left on her door. Folks have found her work phone number and are calling her at work and harassing her.
Thing is for it to get to Pre-foreclosure she must have been delinquent with payments for quite a while? Not something that has happened in the last couple of weeks.
Something doesn't seem to quite add up. but thankfully she's ok, and seems like she's trying to sort it out.
She said if ever she needs to sell she'll come talk to me... so fingers crossed that is genuine.
Again thanks for the great info.
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