Author Topic: Short-Sale/Pre-foreclosure advice?  (Read 342 times)

maz_phil

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Short-Sale/Pre-foreclosure advice?
« on: August 01, 2018, 01:10:38 PM »
Hello Mustachians,

I am looking to buy a property that is listed as having defaulted on their mortgage payment(s), but has not yet been repossessed by the lender. I want to reach out to the owner of the property, and ask them if they would potentially sell it to me.

Is there a way to find out how much their mortgage is for, and how much they still owe on the property? I am also interested in learning how far behind they are on their payments? Do any of you have advice or past experience with these sorts of sales?

Thanks,
Maz_phil

Mother Fussbudget

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Re: Short-Sale/Pre-foreclosure advice?
« Reply #1 on: August 01, 2018, 04:18:58 PM »
I did a short sale 8 years ago.  The owner has to have the house up-for-sale.  The owner has to get the bank servicing the mortgage to agree to the amount offered.  In my case, I had to show I had put the house up for sale, and dropped the price until I got an offer.  I had to go down to half what I paid for it before getting an offer (bought in early 2007, sold in early 2010).  The bank agreed to accept that amount, and the sale went through. 

In any case, the sellers will have to list the house for sale, and get the bank to agree to accept whatever the offer is in exchange for the house.  The bank then writes off the loss, and the former owner gets a bad mark on their credit report that doesn't drop off for 7 years.  But it's not as hard on the owner as a foreclosure would be. 

maz_phil

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Re: Short-Sale/Pre-foreclosure advice?
« Reply #2 on: August 02, 2018, 10:46:36 AM »
I did a short sale 8 years ago.  The owner has to have the house up-for-sale.  The owner has to get the bank servicing the mortgage to agree to the amount offered.  In my case, I had to show I had put the house up for sale, and dropped the price until I got an offer.  I had to go down to half what I paid for it before getting an offer (bought in early 2007, sold in early 2010).  The bank agreed to accept that amount, and the sale went through. 

In any case, the sellers will have to list the house for sale, and get the bank to agree to accept whatever the offer is in exchange for the house.  The bank then writes off the loss, and the former owner gets a bad mark on their credit report that doesn't drop off for 7 years.  But it's not as hard on the owner as a foreclosure would be.

This was incredibly helpful. Thank you for taking the time to share this.

Lmoot

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Re: Short-Sale/Pre-foreclosure advice?
« Reply #3 on: August 06, 2018, 04:19:18 AM »
 I would tread carefully. I can only assume someone in pre foreclosure is feeling quite emotional and defensive, and still trying to figure out their next step (are they going to fight it? Are they going to short-sell it? Let it fall into foreclosure? Bankruptcy? They are also probably getting inundated with similar requests, possibly from individuals but most likely from investors. Foreclosures can last for a really long time. My neighbor has been in pre-foreclosure for over a year.

Also, as someone mentioned before, pre-foreclosure is essentially a Lena. And you will be at the mercy of the lienholder (the bank/lender), even more so than homeowner. I purchased a pre-approved short sale, meaning the price listed it was already approved by the bank. I was able to negotiate a bit lower, but it was within the wheel house of how low they would go, and I negotiated directly with the bank, not the owner. Preapproved short sales go through much quicker. I had the keys in my hand 30 days after submitting my offer.

Even if the homeowner gave you the information you wanted, and the bank agreed to work with you, it could still take well over a year before you could take hold of the property.