by Ilyce Glick and Samuel J. Tamkin, Inman News
Q: I have a legal question concerning buying a property that is about to be foreclosed.
A major concern when bidding on a foreclosed home is that you can’t examine the inside of the property and determine what needs to be fixed.
When trying to buy a property during the pre-foreclosure process can you contact the owner directly? If the owner agrees to let you examine the inside of the property, is it legal to offer the owner the amount they owe to the creditors in addition to an amount of extra cash that they will directly receive? Then after the owner lets you in, if you are not satisfied with the home’s condition, can you wait for the auction to get the property for an amount that will be lower than the debts to create a solid investment?
A: In this market, you can try anything to see if you can buy a property that is being foreclosed. If the owner of the home is available to talk to and wants to entertain a discussion with you, the owner is free to do so. However, many foreclosed homes are vacant. The owners have abandoned the homes and the homes have been boarded up and are not accessible.For homes that are bank-owned and marketed through real estate agents, you can see those homes by calling the listing broker. Sometimes you can call the bank’s REO (real estate-owned) department directly to request a showing.
While your question seems somewhat harmless, if you are using the pretext of trying to buy the home from the current owner and occupant of the home for the sole purpose of getting in but you have no real interest in making a deal with that person, I would advise against it.
If the current owner does not have the home for sale, does not have the home listed with a real estate broker and is not advertising the home, it seems improbable that they are going to see you as a white knight that will save them from the foreclosure process.
It’s more likely that they will ignore your calls. They probably are so far down the foreclosure process that they won’t deal with you at all. If your motives are genuine and you might buy the home directly from the owner and take over the responsibility of dealing with the lenders, go for it. Otherwise, in dealing with foreclosure properties, you will need to deal with them as all other buyers are doing in the market.
To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story. Copyright 2008 Ilyce R. Glink and Samuel J. Tamkin
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See Ilyce Glick’s feature Better Choice: Fund IRA or Pay Down the Mortgage.
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