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Discussion Starter · #1 ·
I'm looking at a property that is not bank owned, yet. It has all the signs of going into foreclosure and I was wondering if anyone has had luck buying properties like this.

Is it better to wait until it is bank owned or try to contact the owners and work out a short sale?

I did some snooping and talked to the neighbors, it's a messy divorce and the house has been vacant almost two years.

The tax records show it is still in both their names.

Sounds like the laundry room flooded, the heat pump is shot, a couple of windows are busted, the carpet is shot and I'm sure the UGS are toast.

I'm picturing an explosion of golden oak, 2 1/4" colonial trim, 4x4 beige countertops with mauve accents and a nice 12x12 über neutral tile floor.


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Divorced and everyone split? The only time I dealt with a divorced couple, they both wanted more money....

A lot of time banks won't go for a reasonable short sale, then wind up selling it cheaper later. I've seen that happen a few times on pre-foreclosure offers.
 

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Discussion Starter · #3 ·
It sounds like the wife lived there for awhile, but couldn't maintain it. When the ac quit she just put a window shaker in.

It always seems someone is willing to pay more than they are worth for the condition they are in.
 

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SBag....

I do a whole lot with flips and foreclosure aquizitions.... IN CO.

First.... You need to understand thoroughly your State's foreclosure laws...... each State is different.... you could pay an attorney an exhoribatant rate who may or may not comprehend the business aspects of foreclosure, or you might do better to check your publuic records and find someone active and proficient in the business to teach/proctor you for a much smaller sum.

As a GROSS GENERALITY, without knowledge of WA foreclosure, and in answer to your specific question and facts as delineated, I am very skeptical of your chance of aquizition thru short sale.

Evaluate the following:

1) Go to public records in your county and check title. ( They may be online in your county...I can tell you/estimate what every/any one in my county owes on their home in about two minutes) They are public records and see/estimate the extent of prior encumbrances on the property. I suspect it is underwater and encumbered by multiple interests. This means that it is almost certain it will go to foreclosure, as trying to resolve multiple party beuracratic and corporate and agency interests is almost impossible.

2) Considering the personal circumstances of vacancy and divorce, you can pretty well be certain that you will not get collaborative cooperation between both parties. Even if title is held in one name, you will not get cooperation wiyhout their interests being served... and they probably do not give a damn about their credit rating improvement with a short sale verse a foreclosure on their record.,, and additionally a normal servicer (bank in laymen's terms) has to prove "fair value? received which is a cumberson slow process.

3) Now with a good knowledge of your state's foreclosure law, there may be multiple opportunities to aquire the prop thru the foreclosure/redemption process by purchasinf a subordinate and small lien... can't say, don't know the property records nor WA law.

4) A bank purchase after foreclosure is basically a long drawn out procedure, with competeing interests, in most circumstances.

For every 10 people who believed the hype around favoraable aquization of distress properties, only 1-2 know what they are doing and are successful.

I've lost (let go) alot of properties to these first time, and only one time, players.

Good luck

Best
 

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Discussion Starter · #5 ·
MTN

Thanks for the great info.

I will be reading up on the foreclosure laws. This would be my first foreclosure purchase, if it works out.

I have looked up the tax records on the county website, but couldn't find any of the other info you are talking about. I'll keep looking when I get home.
 

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MTN

Thanks for the great info.

I will be reading up on the foreclosure laws. This would be my first foreclosure purchase, if it works out.

I have looked up the tax records on the county website, but couldn't find any of the other info you are talking about. I'll keep looking when I get home.
A lot of places have the county registry of deeds on line. That's where you need to look for titles, mortgages, liens, etc. You need to search both owners' names.
 

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MTN

Thanks for the great info.

I will be reading up on the foreclosure laws. This would be my first foreclosure purchase, if it works out.

I have looked up the tax records on the county website, but couldn't find any of the other info you are talking about. I'll keep looking when I get home.
A lot of places have the county registry of deeds on line. That's where you need to look for titles, mortgages, liens, etc. You need to search both owners' names.
Sab....

The department of Public Records/Real Estate/Grantee-Grantor Index/ Recording/Registry of Deeds/PublicRE Records/PubiicRecorders Office etc often goes by similar but different names.....

In my experience, the Tax Assesor and Treasurers Office are usually different departments..... Sometimes you have to go to the Assesors Records to get the owners name to subsequently search title which includes all encubrances/liens on the property...

although the lien is on the property, it is filed (and created) under the owners name of record at the time it occurs.

I'll bet that the internet will have alot of your local Foreclosure Info available.... Needless to say, it has been a hot topic over the past 6 -10 years.

Good luck

Best
 

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i do a lot of homes for fredi mac, and fannie mae, and banks these drama homes are always filled with lots of drama, and can take months to come to market, meanwhile the a/c gets stolen, and all kinds of crap, i will finnish one tomorrow the a/c air handler is missing, but they paid to paint and tile the screened entrance, go figure
 

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i do a lot of homes for fredi mac, and fannie mae, and banks these drama homes are always filled with lots of drama, and can take months to come to market, meanwhile the a/c gets stolen, and all kinds of crap, i will finnish one tomorrow the a/c air handler is missing, but they paid to paint and tile the screened entrance, go figure
Well Chiiiiiiiiiiit, dealing with a quazi governmental organization, it's even weirder than a servicer/bank.:clap::laughing:
 

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If I read your post right and you install a 4 x 4 tile counter top, I'm gonna personally drive across country to Washington from SC and slap you.
 

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Discussion Starter · #11 ·
KermieB said:
If I read your post right and you install a 4 x 4 tile counter top, I'm gonna personally drive across country to Washington from SC and slap you.
Ha ha. No, you didn't read it right. That's what I think it looks like inside right now.

So far, haven't been able to make contact with the owner.
 

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I have done better on price with the foreclosure than on a short sale every time as both the homeowners and the bank are typically delusional when working out terms of a short sale if i am trying to buy it at a price point to flip and make a profit (and I am certain they say the same about me and since I depend on making a profit on the resale I am in fact trying to buy it for well under actual value so they may have a point).

The foreclosure sale is only difficult because while the pricing is usually better there are going to be at least half a dozen bidders. It is better now than 6-7 years ago though - back then everybody and their brother with a savings account or line of credit thought they could buy and flip houses so the auctions were impossible and the sale prices were way over value often. After '08 and '09 enough people got burned that the amateurs have backed away in our area.

If you are looking for a source of properties to renovate and flip it is worth your time to go to the tax sales. The usually go for less than the foreclosures and the quit claim tax deed is easier to settle than the foreclosure deeds that are not signed off on by 1/3rd of the parties usually so end up in a mess for 6 months before any chance of selling it.
 

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Discussion Starter · #13 ·
Thanks RuebenD.

I think it too far past a short sale at this point.
They are in arrears $83,000 and change. They haven't made a payment in about three years.


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It was the same around here ( still is really). I haven't seen a foreclosure go low enough to turn.
Most are ones that people pick up to live in. (Again, I'm in a really small market. )

This house needs more work than most people will understand. It will be interesting to see what it goes for.
 

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Discussion Starter · #14 ·
Just found out today that it is going to auction the first of the year. Anyone one have any experience with foreclosure auctions?



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I recently bought a house on a short sale.

The house was worth about $120. The occupants (owners) were into a bank for $200. The listing realtor got a good opinion on the price and the bank was willing to accept no less than $75 after commissions, costs, etc.

They agreed to give the occupants (owners) $3000 in WAM to leave the place empty and in good condition.

I think we closed in 3 weeks after they accepted my offer of $95 and there was a laundry list of things to get squared away on the abstract, all of which were taken care of.

I'd never heard of such a deal before. The bank takes a bath for so much money, and pays the person in the home to move out.

I'm just happy I'm on the other side of the deal.

Anyone involved in something like this, get your own realtor to deal with the listing realtor and let the professionals deal with everything. It is important that the listing agent be motivated to get the short sale done, and your realtor may have to be that motivation. A couple thousand $ in the deal for your realtor keeps them pushing to make sure the deal happens.
 

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I'd never heard of such a deal before. The bank takes a bath for so much money, and pays the person in the home to move out.
Yeah.. that was the unofficial "Cash for Keys" program. The loans are insured so the banks don't really lose anything unless they need some losses to write off.

Part of the reason why the housing crisis became a crisis in the first place was because the banks were knowingly accepting bad loans. Then when the insurance companies couldn't keep up, they stopped insuring loans and the requirements for home ownership started to tighten up.
 

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I recently bought a house on a short sale.


I'd never heard of such a deal before. The bank takes a bath for so much money, and pays the person in the home to move out.

I'm just happy I'm on the other side of the deal.

Anyone involved in something like this, get your own realtor to deal with the listing realtor and let the professionals deal with everything. It is important that the listing agent be motivated to get the short sale done, and your realtor may have to be that motivation. A couple thousand $ in the deal for your realtor keeps them pushing to make sure the deal happens.
Cleve...

I'd only comment that it's not an issue of right or wrong (probably should be in a perfect world and IMO), but it is just economic reality.

Depending on the State, eviction itself can be a lengthy/costly process. Furthermore, foreclosed parties often strip/vandalize a property.

An inducement / "cooperative stick" is often the best arrangement for all from a practical financial/profit standpoint. (Strange world of laws we live in...huh)

Sabag.... Each State has it's own forecloseure procedure, and "working the auction" to get a favorable price is a negotiation technique.

When foreclosure auctions are done among multiple properties, it is probably smart to show conviction to your desire to obtain the property .... ("I want it for my daughters house" in pre-auction chit chat.

When there are multiple properties and investors involved, they don't want to compete against "personal convicted " interests.... they will look to other offerings.

(I should caution you that direct collusion among buyers in many states is an act of fraud.... however, don't believe that it does not exist.)

In a single property auction, many states are done by an attorney at their own appointed time and place, there is not much you can do to work the auction that other pro's do not recognize.... BUT what you want to carefull of is the non-pros.... who overbid the property... don't compete with them... let them have it... know your limits.... there will be another opportunity around the corner.

Also, if you have smart FRIENDS very nearby to the property, regardless of whether multiple/single property auction, have them "down talk" the property (Oh yea.... I think they had alot of water damage and mold issue)

Most pro's, and even novices, try and talk with neighbors as in most states they have no access to the property....

Be aware ..... and don't fall in love.....

Be aware.... don't be buying work... that is plentifull... be buying opportunity.



And GOOD LUCK..... alot is luck.

Best

Peter
 

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I do, in fact, like to buy work.

The homes I'm buying become rentals. My ideal purchase will have a kitchen or bath which MUST be replaced. Hopefully the HVAC system is missing. Ideally the garage needs to be replaced.

Why? Because if these things don't have to be replaced, other buyers will not replace them. But if they must be replaced, the price is knocked down by the retail cost of doing the work.

I can take that $40 K reduction in price, do the work for a fraction of that, and have that much more in equity built up immediately.
 

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I do, in fact, like to buy work.

The homes I'm buying become rentals. My ideal purchase will have a kitchen or bath which MUST be replaced. Hopefully the HVAC system is missing. Ideally the garage needs to be replaced.

Why? Because if these things don't have to be replaced, other buyers will not replace them. But if they must be replaced, the price is knocked down by the retail cost of doing the work.

I can take that $40 K reduction in price, do the work for a fraction of that, and have that much more in equity built up immediately.
Cleve.....

Agree 100%..... except that is not buying work in my book... that is buying opportunity IMO.


(My reference was to some newcomers that just buy themselves a ton of work for nominal return that they could just contract for, without the attendent risks of flipping. In my way of thinking, you are finding the opportunity that others are unable to capitalize on.... I never ment there was not work involved.... )
 

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I work closely with a realestate guy who lists for the banks. I like bank ones over pre forclosures, only because there is more risk. once the bank takes over, all the cards are on the table. Pre forclosures, there could be all kind of debters who may call dibs on the house.

Getting access to the insides is nearly impossible on forclosures, so one should bid on worse case scenario. A lot of banks do blind envelope bidding.

Pre forclosures, people still owe money, often times they won't sell at a loss for emotional reasons, more so than economical reasons.
 
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