Wholesaling at Pre-foreclosure Stage

[Taylor Herman]

Hi everyone I have a question about pre-foreclosure SFRs. 1. Is it possible to wholesale a pre-foreclosed property and save it from going to auction? 2. If you get a response from a direct mail campaign to homeowners in pre-foreclosure, how do you begin the process? Do you have to have an agent negotiate with the bank, or can you just come to an agreement with the owner? Where is the bank involved, if at all? 3. Can you use a typical "and/or assignee" Purchase and Sell agreement, or is there a more technical, legal process involved? 4. Do you have to pay anything at the time you put the property under contract? Thanks for any guidance you can provide!!

[Will Barnard]

Preforclosue simply means the owner's lender has filed a NOD (notice of default) and if enough time has elapsed, a NTS (notice of trustee sale) for failure to make timely mortgage payments. If you enter into a purchase and sales agreement with a seller in pre foreclosure or any other situation, you still need title, escrow, etc to perform the transaction (or a closing attorney).

That said, trying to wholesale a deal where your sellervid in preforeclosure and you do not have the capabilities or intent to close on the transaction unless you find a buyer, you are getting yourself in a whole lot of potential legal trouble. If you don't find a buyer and you gacknout, then that seller is foreclosed on because they don't have enough time to find a new real buyer, you could be in for a lovely legal battle.