Foreclosure in 55123>Question Details

Paula, Home Buyer in 55122

Buying foreclosure during redemption period

Asked by Paula, 55122 Thu Mar 20, 2008

I am looking at buying a foreclosed property during its redemption period. In that situation, who pays the realtor fees? Is it possible to get the former owners (not the bank) to help with closing costs, or is that adding insult to injury?
Paula

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Hi Paula, Short sales can be very complicated. The bank is pretty much in charge but doesn't really care to much at this point because they don't have possession. Every bank is different. The seller doesnt usually make any money on the deal so I would venture to say no they will not be paying any closing costs. I would recommend buying a bank owned verses and short sale. There are exceptions of course. If your asking price is close to what is owed there may be some negotiating room. Realtor fees are usually paid by the seller as well, up to 3% to the buyers agent. What ever you do dont get your hopes up to high and expect to wait. Some banks drag it out until the 6 months is almost up.
Best of luck!
PS-You should be working with an agent who knows how this works to avoid suprises or it may not close.
0 votes Thank Flag Link Thu Jun 5, 2008
The bank gets involved if it's a short sale. A short sale is when the bank takes less than it is owed by the home owner. If it is a short sale, the bank may pay some closing costs, if the offer is acceptable. They look at the bottom line of the offer. If you have any questions, send me an email at BradAnderson@kw.com
0 votes Thank Flag Link Thu Mar 20, 2008
I'll have to disagree with Lenny here.

If the seller is losing the home to foreclosure and it is already in the redemption period, they have no incentive to spend a single cent of their own money. If you are willing to offer enough to pay off the mortgage holder(s) and all the closing fees the seller shall incur (you can also roll your costs into the loan like Lenny mentioned), it is pretty straightforward.

The problem lies when you are making an offer that is less than what's owed. If that's the case, the seller would have to go back to the bank(s) and see if they will take less than what is owed. If the seller is very willing and cooperative, this can work out but can take anywhere from 2 weeks to 2 months to get an anwer. If the seller is unwilling and/or uncooperative, it is best not to waste your time.
0 votes Thank Flag Link Thu Mar 20, 2008
Your question lacks a few points. Is the propety listed? If it is listed than it should be no different than any other property and you can make an offer to have them pay closing costs and the listing agent will be paid by the seller. If you are looking at making a deal directly with the homeowner then there should be no agent needing to get paid. You can always raise the purchase price and ask the homeowner to pay closing costs to help you obtain the loan. Hopefully I answered your question with the details I was given.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Thu Mar 20, 2008
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