All Forum Posts by: E Wick

Moved this over to the foreclosure forum.

You're going to find that getting a good deal and buying a specific house don't go together. Others here have a higher success rate than me, but I make 12-24 offers to buy a single house. If I get any of the houses I make offers on, I'm happy. If you're going to live in it, you're probably much pickier. But that same ratio may well apply. Which means you need to find a dozen houses you like and try for all of them, hoping to get one.

I'm confused on the situation with this house. Either the seller bought it from the original owner as a short sale, or it went to auction. Both cannot be true. If it went to auction, it may have been sold to this person (or someone else), or may have been taken back by the bank. If it went back to the bank, this seller may have bought it directly from the bank as a REO (real estate owned, a piece of property the bank has repossessed.)

In any case, if the seller has legitimate and full title to it, its theirs to sell. In some states, there are redemption or upset periods after the auction where another lienholder or the previous owner can redeem the property and get it back, or a new bidder can upset the winning bid with a new, higher bid. All very state specific and details vary widely from state to state.

Sounds like this seller is what's called a "wholesaler" in the real estate investment business. Wholesalers buy or contract for houses and then quickly resell them to other investors. The investor buys with cash or "hard money". If you think portfolio lenders are highway robbers, wait till you see hard money lenders. 15% and four points is the going rate currently. It rarely works for a wholesaler to sell to a retail buyer (like you), because you can't use conventional financing to buy a property like this. As you're discovered.

It sounds like this property was previously offered as a short sale. No short sale could be completed, so it went to auction. This "seller" won it at the auction. Sounds like your state may have an owner redemption period. That would allow the previous owner to buy the property back from the winning bidder by paying them the amount of the winning bid. If you had cash, you might get that to work. If you need to finance with a conventional lender, that's going to be tricky to sort out because your money you're getting from the lender has to go from your lender to you to the previous owner to the new owner. I'd put the odds of your lender allowing that to be slim. If you want to try, though, be very upfront with your lender about what's going on. Otherwise, they WILL sort it out at the last minute and kill the loan.

If you like this house, and you can come to terms with the seller, you might do a lease option. You lease the house from the seller for a short time. Long enough to get past your seasoning period. You have an option to purchase with the seller at a specific price within a specific time period. That gives you possession of the property with the lease and control for buying it with the option.