Legal Limbo before Bank Forecloses on Developer

[Yan P.]

Hi All,

I am new to this forum but very excited to be here. Hopefully I can become a millionaire in 2.5 months (Definitely joking). Here we go, I bought a condo a couple years ago for a very reasonable price near the University I attend. Currently, the developer I purchased from has run into some trouble with the building I live in and will most surely be foreclosed upon. I believe I have correctly valued the property and am ready to submit a cash offer.

Here is the issue: I have talked to the developer who is willing to accept my offer, but because he has not made any payments for at least a year, I am not sure how much say he has. I am afraid the bank can legally come after me if they think the developer sold below market value. (This unit is unfinished by the way). I called the bank's REO department who informed me that they don't normally assign agents to the property until it passes through foreclosure. So it is in this "Legal Limbo Land" where I am not sure who technically owns it. Can anyone shed some light on how to go about this?

[Jon Holdman]

Make an offer in writing and see if the lender will agree or the developer can somehow make them happy. If he can't deliver clear title, your offer will go nowhere.

If it was an individual property, you might manage a short sale with the lender. A deal like this is much more complex because the loans likely cover all the units the develop still owns, not just the one you want to buy.