Asked by John, Clarksville, TN Wed Apr 30, 2008

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Allen Moser, , Clarksville, TN
Thu May 8, 2008

Good News and Bad... The good news is that you can still buy the house. The bad news is that if it is owned by the bank then the process of buying it will not be as quick and easy as with the owner. If it is in pre-foreclosure meaning that the bank has not taken ownership yet then it is still possible to buy it from the current owner. There are several ways to do this:
1.) Short Sale- this is where the bank agrees to a price less than what it is owed in order to get some money rather then no money. It is a win/ win/ win situation. The bank gets an amount they are comfortable with, the homeowner does not get a foreclosure on their credit, and you get the house you wanted (ideally well below appraised value.
2.) Another way is a Contract for Deed- (called a land contract in many markets) This eliminates the headache of dealing with the bank. You can purchase the house contingent on you getting financing at a future date. Basically you give the owner a little money (as little as possible) and bring the note up to date (pay the owners back payments for them) the owners sign a deed and place it in escrow contingent upon you paying off the note in the next year or two years or whatever time period you both agree on. When the mortgage is paid off then the deed they already signed is recorded and you own the home. This gives them some money to move and it gives you short term owner financing. If it is an investment rather then a primary residence then it gives you additional options as an exit strategy.
3) The third way is to get them to sign the deed over to you. You own the house. Their mortgage has a due on sale clause, and the bank has a right to call the note due whenever they feel like it. However, it does not make business sense to take a note that was preforming and make it not preforming and if you are nice to whoever calls you from the bank and explain what you are doing and that it is done a lot then they will usually let you do it. If not you can get a mortgage in your name to pay off that mortgage.

Please keep in mind that while I am a Realtor in the market I am not an attorney and recommend you seeking legal advice for any of the above processes.

If you would like to find out more or if you are ready to give up on that house and look for something else I am in your market and would love to help with you with whatever you decide to do.

Allen Moser
Prudential Professionals Realty
(931) 245-6874
1 vote
Trey Bowden, , Edmond, OK
Thu May 8, 2008
Sounds like you'll be dealing with a short sale. I've provided financing for buyers in your position and would recommend that you make sure your mortgage provider is willing to put up with the process of a short sale.

Typically these transactions take longer then expected and are filled with some twists and turns. Also make sure your mortgage provider has the people skills to successfully interact with all the people involved. Their lack of self-control could put your transaction of the slow burner with the bank.

Good Luck!

Trey Bowden
0 votes
Adelina Rotar, Agent, Knoxville, TN
Thu May 1, 2008
Hi John,

You can check if the home you want to buy has been taken back by the bank by checking the tax records. You may email me the address offline, and I can check it for you.

If the property has been taken back by the bank, then your contract with the seller is null and void.

If the property has just receieved a foreclosure notice, now is the time to check and see if the bank would be willing to do a short sale. Short sales are often complicated and drawn out, but there are also those that go thru and you get the house you wanted. Be prepared for 60+ if trying to buy a short sale though.

Let me know if I can help you with anything else.

Adelina Rotar
Realty Executives
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Janie Master…, , Fairhope, AL
Thu May 1, 2008
Hi John,

Your situation is not unusual in these days and times. This happens more than we would care to mention. Everything hinges on whether or not the bank or mortgage company owns the property. A short sale would probably be your best bet, and of course work with a qualified Real Estate Professional so that your interests are handled. I would also recommend that you seek legal advice. Only an attorney would be able to advise you on your individual situation from a legal standpoint. I am a local agent here with Crye-Leike, Realtors please feel free to give me a call if your need additional assistance.
0 votes
Christian Bl…, Agent, Clarksville, TN
Wed Apr 30, 2008

It depends on if it has actually been taken back by the lender. If the bank owns the property then any contract you had with the seller will be null and void. If not, you may still have an opportunity to close on the home, buy the home through a short sale, auction, or after it goes through auction and is listed with a Realtor. After it is listed with a Realtor is probably the safest route because you are buying the property free of any leins. If you buy at auction you want to make sure you do your homework with home inspections and a detailed title search. Should you have any additional questions please let me know. I am a local Realtor and will be happy to help.
0 votes
N. Hunter Ja…, , 29072
Wed Apr 30, 2008
Different markets have different requirements. Did it go into full foreclosure, or was notice just made. If notice was made, you can try to negotiate a short sale with the bank.

Hunter Jackson
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