Contact the Owner in Pre- Foreclosure or before Auction day?

[James W.]

Hi guys  - can you analyse this scenario for me - thanks for your extremely helpful inputs!

I see a house listed for Sheriff Auction. 

The market value of house is 500K.

Owner's Equity is 200K

Judgement Amount is 300K.

1. My first question is - why is it on Auction in the first place? Instead of getting foreclosed - why cant the owner sell it for 300K - and walk away? When they foreclose him - he still has to walk away from the 200K equity. And am sure investors would gladly buy the 500K house for 300K - and pay the owner a little extra.

Btw - this is not a hypothetical example - I am seeing houses like this on the list. That are not in shambles - and are easy to bring up to mark.

Assuming theres a real answer why he cannot sell under the market - and it does land in auction. My questions are:

2 - Can I contact this owner and offer him 300K + some more, so he can pay off the Judgement and avoid foreclosure. What could be some reasons why he wont agree?

3 - Assuming he does agree - does this need lender's approval? If I paid less than Judgement - that would be Short Sale. But in this case I am paying a bit over the Judgement.

4 - Assuming both owner and lender are ok with this - can this be done once the house is already scheduled for Auction? Will they cancel the auction in that case?

5 - Can all this be done Before the Auction [ Pre-Foreclosure] - like - if I come to know the house has been served a Foreclosure Notice.

6 - Lastly - assuming its all done - will this be a normally scheduled closing, with agents and attorneys - so I get the deed and possession.

Thank you.