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khongconai_1, Home Buyer in Carol Stream, IL

Buying pre-forceclosure home

Asked by khongconai_1, Carol Stream, IL Sun Mar 24, 2013

I'm on the process of buying a house as a regular sale, and recently I found out it's a pre-forceclosure. I felt like I got cheated on since I didn't know the information at the beginning. But my question is what should I do now? What happen to my buying process? Any problems that I should be ready to face?
Thanks

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6
You may want to ask your own attorney what to expect in this particular homes case. They are your main guide, now that you are in a contract.
Every situation is different. Your Realtor may have an opinion also.
0 votes Thank Flag Link Mon Mar 25, 2013
Are you working with a Realtor as your buyers agent????? If not then you may reconsider, as there are soooo many advantages to a buyer being represented by an experienced professional a buyers agent who is working on the buyers behalf and in the buyer's interest!!!! If you like to find out more get back to me and I gladly send you detailed information about all the advantages, including that there is not cost to
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As far as a pre-foreclosure is concerned, it really is not yet a foreclosure, you are still negotiating with the
current homeowners, but you may want to have a Realtor on your side checking the mortgage situation
, any liens on the property etc. etc. of the current homeowners before making an offer....

Nobody really cheated you at this time, you just did not double check the owners situation, and you Good Luck to you

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really should be represented by your own Realtor.....
0 votes Thank Flag Link Mon Mar 25, 2013
Pre foreclsoure ONLY means it is in the foreclosure process, it is NOT a foreclosure, NOT a REO home and is common. You should have assessed what the home was worth BEFORE you made an offer anyway and based your offer on that, not their asking price. No one is cheating you as the market price will be what it sells for in any manner. These days only homes needing a ton of work are discounted becuase the amount of buyers is cut by more than 3/4? You need to make sure your dates are in line to close and your mortgage co or bank will make sure the deed is clear.
0 votes Thank Flag Link Mon Mar 25, 2013
Agreed with below.

I would ask your agent to check the mortgage history of the property, determine how much the seller owes on the property, and also if there are multiple liens outstanding. Next, take a look at what you are paying relative to that amount. As mentioned below - is the property a short sale, or a pre-foreclosure where the owner has stopped making the payments?

In any event - the bottom line here is - How much equity does the seller have in the home, and is the purchase price going to satisfy the amount outstanding that the seller owes?

If what you are paying is going to realistically come no where close to satisfying what is owed on the property - then you could have some issues. If there are multiple liens, that could complicate matters even further - as the 1st lienholder will take the lion's share of the proceeds, and may leave the next in line with next to nothing. If this is the case, as stated below, the second lienholder may put a nix on the sale.

If the property is being sold short - then there may be a "pre-approved" price that you can reference to determine if your offer is going to fall within the threshold of what the bank will accept.

Regardless of what the owner will accept - the only thing that matter is what the bank will accept the satisfy the outstanding debt or debts.

I would highly suggest getting your agent, and an attorney involved, if you haven't already. They are the only ones who have direct line of sight to the details - and can offer concrete advice.

Hope that helps!
0 votes Thank Flag Link Mon Mar 25, 2013
I agree with Annette. Pre-foreclosure simply means the owner isn't making payments and it will eventually go into foreclosure if the liens are not paid off within specific timelines. If there is equity in the home when the seller transfers title (sells the property) then there aren't any problems.

Make sure you have a great home inspection to make sure the house is in good condition because many times when a seller is in this position they don't have money to maintain the property.

Have your attorney check to make sure there aren't going to be any financial downfalls that delay closing or make it impossible for you to finish the purchase.

If you love the house, consider yourself very fortunate that you found it now because if it had gotten to the point where the bank took over it would sit empty for a very long time and the condition would deteriorate (in most cases). If you were happy with the sales price and payment level, enjoy your home.
0 votes Thank Flag Link Mon Mar 25, 2013
Hopefully you are represented by an attorney and your own Realtor. Your attorney should be able to give you your legal options. By preforeclosure do you mean it is now a short sale or just that the seller is behind on payments? There is a big difference as a preforeclosure may still close like a regular sale as long as all liens can be paid off. A short sale involves more time and could take minimally 45 days for approval to 3-6 months or more. If the seller's lender thinks the sale price is too low it can reject the sale. If there is more than one lien holder that can delay things even longer since all will need to agree to taking less than what is owed to them. It's important you speak to you Realtor & attorney to find out all the facts and circumstances of the seller's position.
0 votes Thank Flag Link Mon Mar 25, 2013
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