Can I make an offer on a foreclosed house before an auction date is set? (Pre-foreclosure period is expired)

Asked by L.E., 49024 Thu Feb 19, 2009

If a builder's spec home just entered foreclosure status this week and is now 'off ' the market, can I make an offer to the bank before they set an auction date?

I want the house but didn't realize it was transitioning into foreclosure and was a day late on it!

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Brian and Ma…, Agent, Ann Arbor, MI
Fri Feb 20, 2009
Hi L.E.

Both previous answers were great. Bottom line is that the market is crazy, and you need to be represented by a Buyers Agent experienced in foreclosures (raising hand).
We have had lots of experience negotiating the waters of short sales, pre-foreclosures, and foreclosures.
While not good news, the fact is that there are lots of other foreclosure opportunities coming on line in upcoming months, including several builders spec homes.
If you're interested in discussing further, please feel free to contact me. 734-678-9032
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Todd Lands, Agent, Saline, MI
Fri Feb 20, 2009
A good agent in your area would be a good start. Are you working with one already? From what you have said this house may already be directed to a REALTOR for marketing. You should really consider having a Buyers agent to represent you, the Listing agent will be interested in getting the most for the house fo rthe bank. In our area we have seen foreclosures going for full list price and sometimes more through a flurry of offers. Buying forclosures can be a tricky thing and being the succeeding offer can be tough no to pay too much for a property in a market like ours. A couple of my local Ann Arbor co-workers have answered but I can not imagine they know where you are or they would have not offered their services so readily. If you need for me to point you in the direction of a good local REALTOR for your area please feel free to contact me. Your zip code shows me you are in the K-Zoo/Portage area, is that correct?
I wish you well in your quest for information.
Todd Lands, Associate Broker
734/ Mi-LANDS (645-2637)
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Renee Badall, Agent, Ann Arbor, MI
Fri Feb 20, 2009
Yes you can. You need to approach the seller and let them know that you are interested in purchasing the home. When a home is in pre-foreclosure, it means that the homeowner is having trouble meeting their payment schedule. If someone makes an offer and it is accepted and the transaction closes, you have just done the owner a great favor by saving their credit! Chances are you will be offering less for the home than the homeowner owes on their mortgage -- pretty common these days with the way the market has been going. This is called a short sale. This means that the bank is willing to accept an offer for less than the amount owed on the mortgage note. It's a win-win-win. You win because you are getting a great property at a low price. The owner wins because they are getting out from under a huge debt and saving their credit. The bank wins because they are getting money for a property that otherwise would have cost them thousands of dollars to place into the foreclosure process. One caveat: banks will only work with the seller/buyer in a short sale transaction if they are represented by a Realtor. I'd love to help!
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Ann Arbor Re…, Agent, Ann Arbor, MI
Fri Feb 20, 2009
Hi there L.E.

I agree with Mr. Bundesen. However, in my experience, you will need to draft your offer package with the assitance of a Solid Gold Experienced Proffessional in dealing with Corporate entities.... I have not yet met a bank that does not want a buyer! If you have not contracted a buyer agency agreement with a Real Estate Professional... I would encourage you to call me today, and let's go take a look at this home right away, and begin to contact the assett manager at the Bank, and let them know you have a buyer. We can pull a Pre Title Package and find out who the owner of record is, and I have the numbers for most of the assett managers.

Please feel free to give me a call this morning. I am working hard today, and will be available this weekend to meet with you.

Make it a great day! You can also visit my Blog here at Trulia, or at
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Michelle Gor…, Agent, East Grand Rapids, MI
Fri Feb 20, 2009
If it has not gone to sherif sale yet ..................... any one can bid on the home at sherif sale and highest bid wins the home. There will still be a redemption period where the owner gets a chance to come up with money owed. However if the bank has already bought it at sherif sale then...........probably not. However, I would find an good agent in area who knows how to deal with these situations. I have known people to buy them from the bank before it hits the market.
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davidwbrower, , Woodstock, GA
Fri Feb 20, 2009
No... because until the foreclosure proceedings occur, the bank does not own the home. It still is deeded to the borrower. The foreclosure procedure is the legal process whereby the bank can obtain title. Your best best is to watch the foreclosure proceedings and then buy it after foreclosure. Now since it is still owned by the borrower (builder) then you could technically make him an offer but it would have to be high enough to completely satisfy the debt on the property. If the bank gets paid in full then that would obviously stop the foreclosure proceedings. Find out from the seller the amount that would satisfy the loan and if you are willing to pay that amount then make that offer. You would have to have the ability to pay for it quickly though since it sounds the home is nearing an auction date. Pre-foreclosure is not an official period, just a term we use to discuss the status of a home. A home is in pre-foreclosure when a borrower is delinquent and the lender has informed them of the possibility of a foreclosure. The pre-foreclosure period ends the day the home is foreclosed on. Banks may postpone or hault a foreclosure if they are going to get paid in full. Good luck with that one. If you don't have cash or financing completely ready to close quickly it's probably not going to be an option for you.
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