Does full price get it done?

These REO or bank owned properties can be frustrating to buy.
You see it listed, approach the listing agent make a full price offer
and....not good enough. It's attractive because REO's are usually
the lowest priced homes in a neighborhood. Unfortunately, the listing
agent will take MULTIPLE offers on the property. In essence, it becomes
a bidding situation. Yes, even if you're the first one to show up and put down
a full price cash offer, the listing agents are instructed to take as many offers
as possible within a specified time frame. How can you keep from missing out
on a great deal? Be in position to make the bank deal with you.

I'll explain how in my next post...

Two paths of action with a foreclosure

Receiving the lis pendens via a process server is a nerve shacking experience for most people. Unfortunately, many people freeze up and do nothing all the way until the house goes to final auction months down the road. For those who choose to be proactive, there are two paths of action required when defending a foreclosure and/or trying to resolve the problem before the bank takes the house back at auction. If you received court papers, you have 20 days to respond. I'm sitting in Florida which is a judicial foreclosure state. That means the mortgage holder has a right to defend himself. Simultaneously, you should also contact your mortgage servicer and request a loan modification application or short sale package. Don't make the mistake of only talking with your mortgage servicer. even if you are talking with them everyday, the bank's attorneys are filing papers in court, marching towards a final foreclosure! I've seen it happen. A homeowner is in constant contact with the bank, but the representative on the phone is not in contact with their attorneys. Ignoring the court papers being sent to the home, the homeowner THINKS he has it under control only to find out the home has gone to final auction sale. Be proactive with both the lender and the court papers!

Finding a buyer to save your home...

In my last post I was talking about how you can save your home by having someone buy it, then turn around and have you as a tenant. The most difficult part of this process is finding someone willing to first, buy an investment property and then take the risk of having the owner who is losing the house stay on as the tenant. The obvious concern for the investor is that if the owner was unable to pay his mortgage he will be unable or unwilling to pay a monthly rent. However, the new buyer needs to be aware that the new monthly cost of ownership will be significantly lower than it was prior to the market collapse. Your best prospect is going to be a buyer who knows you well enough to help you. If the buyer already owns a property within a 50 mile radius, he will have to put down a deposit to secure the mortgage. If the buyer doesn't own any property, then there are a number of loan programs that require very little down. You should start this process before the bank sets a final auction date. You will be trying to finalize a short sale price with the foreclosing mortgage company. Add up the monthly costs. Mortgage,taxes, insurance and HOA fees are all part of that nut. The buyer will want to make a return on his investment, too. If you can come to an agreement on a monthly rent that is affordable for you and profitable for the new owner...you have just found a way to stay in the home.

Got a good friend? Save your house..

AS more and more people try to save their homes with a loan modification a sobering
reality continues to be the result. Denied! Actually, only one out of twenty loan modification applications get approved. So, if you want to keep your home, what do you do?
Sell the property through a short sale to somebody who would be willing to keep you in the
property as a tenant and ideally, buy the property back someday when you have reestablished, your financial life and credit. There are restrictions. The buyer can't be someone living in the house or a relative. It must be what is called an arm's length transaction. So, how do you make it attractive for someone to buy your house heading to foreclosure? Approach it as an investment. The buyer would have a turn key rental property. Provided the monthly rent will cover the mortgage, taxes, insurance and HOA fees if applicable. It's not enough to cover it, the buyer is taking a risk. There should be a monthly profit in there for them, too. In my next blog..I will outline how one family did exactly that.