Foreclosure in 92056>Question Details

Ross, Home Buyer in 92056

is it legal to contact the home owner and buy directly from them before they loose the property to foreclosure? what is the process?

Asked by Ross, 92056 Mon Jan 2, 2012

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Ross, Great answers from the professionals here. As a lender, I want to chime in on agreement that having your own representation from a buyers agent will really 1). Help you accomplish your goals and 2). Protect you in the mumbo jumbo of the process. I have rarely seen a consumer come out on the upside of a transaction when they enter into it without adequate agent representation. Yes, that does include an adversion to buyers and sellers working with dual agency. I believe (and, experience has taught me) that each party to the transaction should have their own representation. Best of luck to you!
1 vote Thank Flag Link Tue Jan 3, 2012
You have received sound advice so far. Here are a few other thoughts...

If you make an offer on a default property in California, do it in writing, as you may be helping the sellers by prompting them to start the short sale process with their lender or lenders. You don't even have to say that you know they are in default as this can cause the seller to become angry. By making an offer in writing (yes, a Realtor can help you make an offer on a property that is not listed), you will up your chances of hearing either a yes or a maybe fromthe sellers. They can always turn down your offer, though, often times an offer helps bring about recognition that something needs to be done.
Remember that if the property is owner occupied (1-4 units) and you will not be living in the property, then you must adhere to Calif. Civil Code 1695 (protections for sellers in default). Note exceptions and required written notices, font sizes for notices, wording and time frames etc. Realtors have access to the Notice of Default Purchase Agreement (NODPA) which should meet all state requirements.…
You should also know if there is one loan or more in default, the date of default, the legal owners, sales comparables, the legal description and have all the corresponding documents (such as deeds, notices etc.) for review.
1 vote Thank Flag Link Tue Jan 3, 2012
Hi Ross!
As stated below, it is legal to do what you are describing. It is very likely that someone who is in the foreclosure process owes more than the home is worth and thus, can only do a short sale. You definitely want to work with a REALTOR that is experienced in short sales and in Oceanside.

Ta-Da- My name is Sinead McAllister and I am both. Call me when you can if you are interested in buying a short sale or foreclosure in Oceanside.

Sinead McAllister
1 vote Thank Flag Link Tue Jan 3, 2012

The homeowner will require a Realtor if the property is facing foreclosure. The Realtor will need to negotiate with the foreclosing lender on their behalf as others have stated it is a long and detailed process. I have yet to see a homeowner do a for sale by owner when it is a short sale it does not make any sense when there is zero monetary return to them.
0 votes Thank Flag Link Tue Jan 3, 2012
But is it worth it.? It will be impossible to find some one that has equity and is loosing their house. You can study N.O.D lists to find distressed properties. But there are seasoned veterans of this practice that have teams of employees doing the same thing that you will be competing with. Once you find one you are going to have to initiate a short sale. At this point you are going to have to hire a real estate professional. I would hire an attorney. This process will take about a year and will in the hunt consume most of your time. You will save maybe $10,000.00-$30,000.00 on a $300,000.00 purchase if not get burned.
0 votes Thank Flag Link Tue Jan 3, 2012
Yes. A buyer can contact a home owner directly and purchase a property.

Agents are just that--agents for buyers and sellers. But the transaction itself is between the buyer and the seller.

In today's market, most houses heading toward foreclosure are likely to be upside down--worth less than the mortgage on them. But that historically hasn't been true, and I'm sure there are some foreclosures today where there's equity in the property.

As others advise, you'd be much better off with an agent representing you . . . whether or not the seller is represented. You'll need that expertise. In fact, asking "What is the process?" is good evidence that you need a real estate professional representing you.

Hope that helps.
0 votes Thank Flag Link Tue Jan 3, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
Unless you're a seasoned pro in distressed property acquisition you'd be wise to work with an RE professional who has hands on short sale and foreclosure experience in the geographical area you are looking in. We would be happy to walk you through this process and we have had years of experience in this arena.
0 votes Thank Flag Link Tue Jan 3, 2012
It is legal but since this is likely a short sale you would probably be better served and protected if you use a licensed real estate agent. Short sales are extremely complex and can result in a foreclosure anyway if the lender has mortgage insurance, regardless of being under contract.

Also, many lenders have given up as they get closer to a foreclosure date and may or may not talk to anyone about it, plus they sometimes do damage inside the house as they blame the lender for their problems.
0 votes Thank Flag Link Tue Jan 3, 2012
Hello Ross,

I see you have questions about home buying. I would suggest consulting a Real Estate professional, it costs you nothing as the buyer but it does provide a ton a support and experience in purchasing a home - especially in this market of foreclosures and short sales. I am born and raised in Oceanside and do almost all of my business in Oceanside. Please feel free to contact me and I am more than happy to take some time to answer your questions and get you on the right track to becoming a home owner.

Best of luck and I look forward to meeting with you,

0 votes Thank Flag Link Tue Jan 3, 2012
In the vast majority of cases, people losing their home in foreclosure are severely upside down. In order to purchase at current market value the bank would have to approve a short sale and be willing to right off the losses or pursue them through other means.
Most lenders that approve short sales want them presented to the broadest possible market though listing them with an agent to ensure they obtain the closest to full fair market value.
I would suggest you find a great local agent with successful short sale experience to contact the owners on your behalf and see if they would be willing to participate with a short sale. It could benefit them through allowing a longer occupancy until the short sale is approved, 3 to 9 months commonly, and allow them to recover their credit sooner.
0 votes Thank Flag Link Mon Jan 2, 2012
Hi Ross,
As a non-licensed agent, is it legal to contact any homeowner to see if they want to sell to you. If you use an agent, then that agent needs to make sure that homeowner isn't already represented by a real estate agent. As for what the process is after that, it really depends. The seller should use an agent if they are going to attempt a short sale and if you are unsure of the process, then it's best for you to use an agent, as well. The good thing, is that the commissions are paid by the seller or their lender.
0 votes Thank Flag Link Mon Jan 2, 2012
It is in Indiana. There are many issues involved. The bank would also need to be contacted. Be careful to check on any and all liens against a property. There may be more than one mortgage or a contractors lien.
As far as the process, a title search of the property would be recommended. Talking to the homeowner would be necessary. Approach them with respect and truly wanting to help.

Good Luck,
Christine McDaniel
0 votes Thank Flag Link Mon Jan 2, 2012
Ross, you can contact the home owner directly with no need of agent..but you need to have the lender if you plan to finance. The process is not so difficult as described above by agents (they all want that 3% commission from you, hence none forgot to advertise themselves.) it is similar to buy a financed car. You will save a lot by not getting help from agents. They are all hungry for money.
Flag Sun Feb 3, 2013
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