Can I buy property from lender before auction?

Question

Hi all - I hope I am not double posting.  I posted some info on this  property already, but I can't find where I posted it & don't know where to search - still new to the site - so please forgive me if it's a double post - but I am asking more info on the property.
I am looking at a small empty lot in my neighborhood (I live in Georgia) that I found in the legal notices - going to auction Dec 4.  I have check with the courhouse on background info & suchand will be going to the auction to bid on it.
*** My question is:   Can I buy this directly from the lender before the auction?  Buy the NOTE?  or Shortsale or something?  
***
It doesn't look like a mortgage.  It looks like the owner purchased the lot for 15,000 cash 5-6 years ago & must have taken out a loan 2 years ago and had the property for collateral or security.  The loan is only 2,700 and the bank is auctioning the property.  
This is my first auction & have no idea how much competition will be there & if anyone will be bidding against me - I'm assuming if there are other investors in the area - that they might be interested in it and bid.  So I thought if there was anyway I could buy before - I would want to. 
Please advise anyone knows the exact process & if I would be able to contact the atty or bank to purchase in advances.
Thanks so much for your help...Angie

N/A N/A · Answer

If a property has not gone to sell yet, then the owner is the HOMEOWNER on the mortgage.  The reason why the lender is foreclosing on the property is because the lender knows that in order for them to get the property transferred back into their name is to follow the process of foreclosure.  So if there is going to be any working with this property in any way, you must talk to the owner who is the HOMEOWNWER.  Remember the HOMEOWNER FIRST RULE. Good luck.

Dick Green · Answer

Good experience is worth it's weight in gold.  The goal is to get a little better each time.

Jon Holdman · Answer

Well, congratulations in any case on getting out of the house and taking a stab at something.  Even if it didn't work out this time, its an attempt.

Jon

Angie Hills · Answer

Hi all - wanted to keep everyone posted on the property auction.  We went today, but didn't win  :cry:  
It was well worth the visit though.  I contacted the atty yesterday afternoon & she only had 1 pce of property & wouldn't be doing it until 3:00 pm. (I know there were other properties earlier w/diff. atty's & banks - but did not attend)  There were only 2 other guys besides me & my husband.  One waited in his truck until the atty showed up, the other was sitting on the steps & said he had been waiting all day.  He asked what we were there for & said that he's been doing this for years.  I don't think he was as 'smart' as he wanted us to think - I'm pretty sure he was trying to 'scare' us off since we were new - he kept making comments like - you have all your cash ready?  Have you seen the property?  I walked all over it & the septic needs to be replaced... There's a bunch of taxes due, etc.  I asked him how long he's been doing this - he said 'years' - I asked if there was usually a large group at the auction here - he said 'a few regulars' - but the larger town abou 30 miles from here he said is crazy with people.
He didn't win either though - the third guy won at $8,500.  My husband said he looked like a contractor.  It was definately worth more - if we had more cash available - I think we would have went up to 10,000.  County has it assessed at 26,000.
Oh well - got the experience & hope we find 'our' deal in the near future.
Thanks again for all of your help.
Angie

Dick Green · Answer

God Bless the works of you hands to prosper and cause a positive contribution to those around you!

Angie Hills · Answer

Thanks for all of your input.  I am starting to understand the whole pre-foreclosure process a little more.  And I have heard something about buying a 'note' but didn't understand it until your explanations.
It's all starting to make sense  :)
Thanks again for all of your help!  I did not pay for a title search - but I paid for access to my county's records of liens & deeds and have found no liens.  The property is 2 years behind on their taxes - I'm not sure how often our county has a tax sale - I contacted them on this & they said only a 1-2 times a year.  Taxes are only 3-400 a year - so even having to pay a couple of years back taxes would be fine.
We have physically gone to the property and walked it - it is only a couple of blocks from our house.  It is vacant now - but has the electric pole & septic tank where a mobile home was.  My husband and I are going to the auction on Tues with $6,000 cashiers check and would love to bid on it.  I'm assuming the bank will start the bid at 2,700 (less or more depending on what has been paid down & what other fees have be accumilated) and we are only in a financial position to bid up to 6,000 & pray we may get it.  We have never been to an auction & have no idea how many properties and or how many people/investors will be there - we may get blown out of the water from the beginning - but we're hoping this is a smaller/med town & maybe not too many investors & hopefully not to many worrying about an investment as small as this.  But we'll never know until we try.
If any of you are prayers - please pray for us!  :)
Thanks again for all of your help and support!

Jim Watkins · Answer

Wheatie beat me to it.

Foreclosure investors are prone to think they can deal with the lenders before an auction. Sometimes to buy the property and sometimes to try to work some sort of deal with them (short sale included).

What Wheatie said is 100% accurate. Not only can the lender not sell you the property (they could sell the note but thats not common) but they can't even talk to you about the property.
You would need to get written permission from the owner for the lender to talk about the property.

It sounds like a good deal but if you haven't talked to the owner yet, I would walk away unless you can contact the owner quickly.

One other note..... DO NOT EVER consider buying ANYTHING from an auction unless you have had the title researched by a title company or a person who is qualified to research title. My guess is there is some other sort of lien on that property (tax lien, IRS City etc.)

Jon Holdman · Answer

To answer your specific question, no you cannot buy the property from the lender before the auction.  Why?  Because they don't own it.

You can track down the owner as Dick suggests, and try to buy it from them and stop the foreclosure.

This doesn't sound like a short sale. From your numbers, it sounds like there's plenty of equity in the property.  If its worth anything close to the $15K, getting it for $2700 plus costs would be a great deal.  If the owner's willing to just let it go, though, it might not be worth as much as he paid.  The owner might be willing to sell it to you for just enough to pay off the loan and the fees and stop the foreclosure.

You could also try to buy the note from the lender and continue (or restart) the foreclosure yourself.  Its possible that the owner might catch up the note, and then you would have to accept the payments.  So, be prepared for that possibility.

Jon

Dick Green · Answer

sounds like not a lot of time to work with.

I would suggest checking the tax records and trying to find the current owner on the tax record or any heirs, to determine whether or not there might exist any rights of redemption that can be exercised to either halt the sale or utilize to purchase after the sale.  The easiest way to purchase before the sale is to cut a deal with the owner/heirs before the sale.