forclosure in 30 days - Posted by markr

Posted by JGoodsen on October 25, 2000 at 09:25:16:

you insist on an exclusive option. Take a non-exclusive option and you haven’t harmed the seller. You may be his best hope, though.

forclosure in 30 days - Posted by markr

Posted by markr on October 25, 2000 at 05:58:47:

Seller called me on one of my ads. He has a house that will be going to trustee sale in 30 days.He has allready gotten the lenders to discount the loans.The numbers go like this. Appraised 10/2000 $988,000.Loan ballances 845,000.Discounted to 731,000 Should I just get this under contract and try and resale, with such big numbers it might take awile. Please Help

Re: forclosure in 30 days - Posted by dewCO

Posted by dewCO on October 25, 2000 at 22:40:46:

Unless you really know how to market something in this price range in a hurry take an option and decide how much you want to make, then run a “Steal this house, but must move fast” ad and see what you get.

Re: forclosure in 30 days - Posted by Bill Young

Posted by Bill Young on October 25, 2000 at 09:54:17:

Mark, you say the sale might “take a while” You don’t have a “while”. (30 days) Using your suggested scenario, I see either you and/or the owner being hurt. Even if you found a buyer, could he get a mortgage commitment in time? Those are big numbers. What if he didn’t qualify for the mortgage? You would not want to be sued by the owner if you couldn’t perform on the contract and you wouldn’t want the owner to get his hopes up and then be blindsided by the sale 30 days later. Also, why risk your option money?

Here is how I did a similar deal. Contact the lenders. They already have agreed to discount their loans, they are Motivated! Tell them you have some clients? that may be interested in taking over the loans. How much would they have to pay to reinstate? Get a number in writing.

There are people actively looking for houses in that neighborhood/price range. Who are they? Probably 20- somethings working for dotcoms! Seriously, use your “option money” to run ads in papers they are likely to read. Add a $10-20,000 fee to the reinstate number you got from the lenders. Make up an agreement between you and the prospective buyer before you show him the house. Besides the reinstate amount, which should have your fee included in it, make sure you put in non-circumvention language which prohibits them from running to the lenders themselves after they see it and cutting you out! They will do that if they can. Once they find out the size of your fee, they will despise you for taking advantage of them. Of course, they are taking advantage of the seller and the lenders, but that is different!

You may also want to contact real estate brokers that handle that area. They probably have clients who would love to get a deal in that area that would agree to pay them a reduced, buyers-broker commission to get them a deal. Your fee is on the financing, so it should not be a concern of the real estate agent.

Good luck!
Bill Young

Re: forclosure in 30 days - Posted by JGoodsen

Posted by JGoodsen on October 25, 2000 at 09:02:52:

With a short fuse like this I’d be wary. Can’t hurt to get an option, though and see what happens. Only costs you a few bucks for option consideration and then whatever you spend in marketing. If the lender is willing to take a $100,000+ discount on an asset that has value that must mean they really don’t want it back for some reason. The flip side of these discounts is are they willing to reinstate, and what are the balances required to do so? Might be another way to do this besides trying to flip it.

Re: forclosure in 30 days - Posted by Mark-NC

Posted by Mark-NC on October 25, 2000 at 07:14:56:

I personally wouldn’t put a contract on it. I may however put just an option on it and market it hard as a desperate seller. But with only 30 days left it may be very hard to pull off. All depends on if you want to blow some money to market it. I think chances are slim but you never know.


you can’t do that to the seller - Posted by Curtis

Posted by Curtis on October 25, 2000 at 09:08:05:

What happens if you get a 30 day option and it dosn’t sell? Your out a thousand bucks maybe, maybe. What happens to the seller in forcelosure? He loses everything, that sucks. We are all her to make a profit but not necesarily at other peoples misfortune and we should think about that before doing some deals. The goal is to WIN/WIN get the seller out of trouble or whatever there motivation is and benefet from helping them. Optioning someones house in foreclosure when they have 30 days just so you might save 3 months PITI is kinda selfish. Why dont you sell it for 50k under market, sell it quick and make a quick 50G, of course that is if you sell it yourself. Well good luck.

Curtis (SD)
p.s. where did you get the seller from an ad? what does you ad say?

Why not? - Posted by Mark-NC

Posted by Mark-NC on October 25, 2000 at 10:46:31:

Like Jgoodson posts below, he is correct. Sure you can do this, just make it a non exclusive option. Who ever sells it first wins. The owner has nothing to loose by doing this. The fact is it looks like they are going to loose the home anyway so why wouldn’t they accept it?

Providing the circumstances there are not many choices in this short a period of time. In my eyes there is not a win win situation for this one at this time, all there is is a long shot.

Sure it would be nice to sell it for a quick $50K that would be the idea of the option. But considering the numbers on this deal I don’t think they are going find alot of buyers that will even look at this home.

If they do some heavy marketing for a week as a desperate seller, someone may come out of the wood work. Who knows!

As far as loosing $1000. I wouldn’t present the option unless I could get it signed up for less that $10. And because of the fact that it is a long shot, more than likely you are going to loose your option fee.

Is it worth the effort? I quess it all depends on your situation and if you know any potential buyers in that buying arena. I certainly don’t so I would pass.