Posted by Matt (NJ) on January 27, 2005 at 13:20:31:
Thanks everyone for your help. I love this site. Yesterday, I stopped by the property and rang the door bell a gentleman answered and said he wasn’t the homeowner. But she will be back in an hour. He asked for my name and #. I have not heard from the homeowner. If I don’t hear anything from the owner I’m going to the auction tomorrow. I would love to bid on it(100K in equity) but won’t. I’ve received a lot of valuable advise from this board. I don’t want to make a costly mistake. Thanks. Good luck to all!
Help- I want to buy house being Auctioned Fri 1/28 - Posted by Matt (NJ)
Posted by Matt (NJ) on January 25, 2005 at 20:05:44:
I found a house today that is being auctioned this Friday at a Sheriff’s sale. Judgement is $288k, resale value 400k. Don’t know the condition of interior. The house is on a nice block in a good location. This is my first deal, I want to try and buy the house before the auction. I know I have to do a title search. What’s the best way to buy the house before the auction?
Posted by IB (NJ) on January 26, 2005 at 17:38:09:
Hi Matt. In addition to all the other info you received on buying at a sheriff sale, don’t forget to get a title search done as well as check the municipality for how much is owed in taxes. Fed., state, and local taxes are senior to the $288k first mortgage. BTW, have you confirmed (at least via a preliminary title search) whether or not the $288k is a first mortgage?
IMO, out of the three types of foreclosure investing (pre-foreclosures, sheriff sales, and REO’s), sheriff sales are the riskiest. So BE CAREFUL!
Posted by Redline on January 26, 2005 at 01:35:58:
Matt, have you considered the idea that maybe the homeowner does NOT want to sell their house and that they’d do everything and anything to make sure that doesn’t happen? What then?
contact the owner and make offer,if you don’t have the cash try sub2 but you need to have enough cash to reistate mortgage. Search archives for more info on sub2
Posted by Matt (NJ) on January 25, 2005 at 21:35:50:
John - Thanks for your advise. I’m going to call the owner and/or stop by the property first thing in the am. I think I have enough $ to reinstate the mortgage.
How can I find out exactly how much $ is needed to reinstate?
Posted by JohnB_NJ on January 26, 2005 at 21:40:37:
Matt,
I have been buying at sheriff sales in southern NJ for 4 years now. if you want the truth, email me for my number. It isn’t all good but if you know what to look out for you will be ok. I would rather tell you the truth so you can go in without getting hurt. OK.
Email me at Jbittel@yahoo.com.
The owners of this site know me personally so you can be sure I will give it to you straight. But to be very frank with you, I am very very busy and I cannot help everyone but if you are committed to this business and you have the resources to buy at Sheriff sale I will see what I can do for you.
In the mean time, good luck and bid with you head because the competition at Sheriff Sale is feirce these days and you don’t want to over pay especially for an occuppied house.
Posted by rehabber on January 26, 2005 at 09:04:12:
Matt -
While I respect your zeal and ambition to want to do
a deal, IMHO I think you need to do more homework.
You said…“I think I have enough $ to reinstate the mortgage.” Reinstating the mtg will be far LESS
than paying off the judgement at the Sheriff Sale.
You said if the homeowners don’t want to sale -
“Then I go to the Sheriff’s sale and hope that there isn’t a lot of competition”.
If you only THINK you can get together the few thousand
$$ to reinstate the mtg, then there’s likely no way
you have $288k CASH to buy at the Sheriff Sale (not
many people keep $288k CASH around).
Depending on the state/area, most Sheriff Sales are
10% upfront, the balance due in 7-15 days - certified
check or cash. If the homeowners still live there,
no way you can get a loan in the short 7-15 days as
the mtg lender’s appraiser won’t be able to get into
the house.
A loan isn’t going to work. If you don’t have
$288k cash liquid, ready-to-roll, PLEASE do NOT bid
at the Sheriff Sale. If you bid, and win, and say
you can even come up with the 10% ($28.8k) right
then, you’ll likely not be able to come up with the
other 90% due in the short time and you could lose
the whole $28.8k deposit you made since you couldn’t
come up with the balance. That would be a very, very
costly mistake.
The best bet is contact the owner, as others have said.
If it goes to Sheriff Sale, and you want to see how
Sheriff Sales work, go to the sale to see the process
andf see how much it ultimately sells for (or if it
goes back to the lender), but for God’s sake, if you
don’t have $288k cash, do NOT bid at the Sheriff Sale-
sit on your hands and watch the proceedings.
Get an authorization to release (ATR) infomation and call the lender and get a fax number and fax it to them. follow up shortly with another call or they can fax it back to you.
You could also try the lawyer that is handling the sale. Neither place will talk to you without the ATR.
Check the condition of the property and be sure of your costs and double check the numbers. Don’t spend a dime til you get the deed. If the seller is willing and motivated, you might have a deal. Be sure to check for other liens and mortgages. What is your exit plan? You might think about land trust if you buy and hold. Good Luck
Thanks for your opinion. I have been to sheriff sales before, I know the process. 20% of purchase price upfront, certified check or cash. Balance due within 30 days, at which time the deed is delivered.
I agree reinstating the mortgage is far less than paying off the judgement. I have enough for the down payment, and am currently talking to a lender about the balance.
I’m trying to reach the owner via phone but have not had any luck. I’ll go by the property later today.
If it goes to auction and I don’t have the financing I’ll sit on my hands.
Posted by Redline on January 26, 2005 at 10:54:15:
Well since you’ve got the sheriff sale thing down (so it appears) … all that’s left is “good luck!”.
Do you know how to deal with the eviction afterwards, assuming the people are still in the house?
Are you prepared to walk away from your 20% if a lender cannot come through with the rest of the money? (bad idea btw to not have the funds lined up).
Are you prepared to sit and be out your 20% for months (maybe) should the homeowner sue and challenge the foreclosure after the sale?
Are you prepared to deal with the fact that the homeowner may take the insides of the house with them (including the walls) when they vacate after the sheriff shows up?
Posted by Randy (SD) on January 26, 2005 at 13:27:43:
Authorization To Release Information
To:
Address of lender: Street, City State Zip
Account number: 555-5555-56575678
Address of property: Street, City State Zip
Borrowers: Joe and Sally Borrower
Date: January 26, 2005
To whom it may concern:
We, the undersigned, hereby request and authorize you to release any and all information with regard to our (Type of Account) account, to (Your Name Here). This authorization is continuing, and shall not expire. We further authorize you to release any written correspondence, statements, or forms with regard to our account to the above listed person(s) as well.
This authorization may be transmitted via facsimile.
Signature of Borrower,
Name: Joe Borrower
Soc. Sec. #:
Date of birth:
Signature of Co-Borrower,
Name: Sally Co-Borrower
Soc. Sec. #:
Date of birth:
Re: Running before walking … - Posted by Heather_Tx
Posted by Heather_Tx on January 26, 2005 at 13:48:17:
Also… I would be very very leery of this deal. Always remember (sorry to all you lenders out there … don’t shoot me ! LOL) That alot of lenders will promise you that they can do the deals, and in the end they cannot. I have had this happen to me more times than I care to even think about and wouldn’t want to lose my 28K for a lender not being able to preform as promised.
I like to be completely in control of the deal, and losing that much if the lender can’t come through is a very high risk I wouldn’t be willing to take.
Ask yourself what the WORST Possible scenerio would be. (I would assume the lender not being able to fund) and how that would impact you, and if you could handle losing those funds. If your answer is no, I wouldnt’ suggest going through with this unless you could get it before the auction from the sellers.
I have had one of those “worst case scenerios” and it was not because I didn’t perform, but because a partner did not. In the end I made 5K on the deal that should have netted me 20K or more and took almost a year to move it. Having your money in things you cannot control 100% is not a wise thing, especially when you are starting out. Costly lesson, but one I will not be needing a repeat in =)