New Jersey Pre Foreclosure

[Chris Daliani]

Hello BP,

I know of a property that is in pre foreclosure. I went to the local city hall of the town in New Jersey to inquire about the property. They advised that the owner was in pre foreclosure. My question is....how do you go about trying to purchase a pre foreclosure in the first place?

Do you contact the attorney for the bank first to find out what is owed? Or contact the current owner and make them a deal? Once contact is made can you buy directly from the owner or everything has to be done through the bank?

Thanks!

[Kevin Zimmer]

I love short sales. BUT, they can take a lot of time, and the outcome is uncertain.When a house is in pre foreclosure the first person you need to convince to sell is the owner.  Banks have a lien on the property, but at this point they do not own it (they just need to release the lien to pass clear title) Lots of investors buy pre foreclosure lists and send yellow letters and postcards.But most owners are in denial and do not take action.You can try to send a letter, but if the property is in your area it might be more effective to leave a hand written note (not in in the mailbox) .Some people knock on doors.I am not recommending that because a hostile situation could develop. If you do get the owners attention, listen to their problem.The solution will come from the questions you ask. I have had people sign over the deed and let me bring the loan current, then I continue to buy the property subject to their mortgage. If the owners want to vacate and sell, you will most likely need a real estate agent to list the property.Before doing this, make sure you get some type of agreement from the seller that they will sell it to you.Even an option to purchase should work.But make sure you formalize this step, or another investor may step in and steal your deal.You will need to list the house because banks want the most money for the property, so they will require it to be on the market with active efforts to sell.You need to make sure you use an agent that has a good track record with short sales.That agent should have a team of individuals (paralegals, attorneys) that negotiate with the bank.The agent will get both sides of the deal, so they are more willing to take a quick cheap offer from you.But banks will still get appraisals or BPO’s.They won’t give it away, but a skilled listing agent should be able to present comps to the appraiser to substantiate your offer price.Good luck