All Forum Posts by: Matt Eilers

Recourse:
1) call his/her's company, ask to speak to the managing broker. Explain what happened and ask if someone in their office can give you more information and possibily assist you with the purchase of the 3 condo package.

2) call the local area Association of Realtors or the State's real estate commission and file a complaint.

You can also ask the managing broker if this 3 condo package is MLS listed (as in open to all agents). If it is, then feel free to call any agent in the area and they can get you the information. This would probably steam the managing broker and cause them to have a talk with the agent as the company just lost revenue.

Hope you find the previous homeowner. It might be better for them to try to resolve it via shortsale than foreclosure (at least for their personal credit), plus it is no skin off their back to forward a purchase contract to B of A to see what they say.
If that doesn't work...eh. Bidding at the foreclosure sale is a possibility, but one that would have existed to you with or without owning the 2nd lien I believe.

Best of Luck!

If the HOA is the junior lien and you just bought it and the property is upside down...I would get a lawyer asap.

Echoing everything Jon said and adding DO IT TODAY!!

If the 1st lienholder forecloses, they wipe out all junior lienholders...you. You are left with nothing. They are under no obligation to deal with you either.

Generally, if you buy a junior lien, you want to make sure there is enough equity in the property to cover the 1st lienholder, that way, if the property sells, it now has a better chance to cover 1st & 2nd lien.

Again, nothing with regard to this situation sounds good. I would call a lawyer asap especially if you put any significant amountn of $$ into this junior lien purchase.

Best of Luck!

I will further clarify on the Buyer Agent are free statement as while that holds often, it is not a given (wrote about the same time as Bryan's, so want to further clarify as he is correct, but often, the Buyer does not pay anything using an agent for a successful purchase). So, further clarification.

If you do hire an agent, they will typically have a certain success % fee (let's say 3% for the sake of the discussion).
So, yes, Buyers agents are not free as upfront you sign a contract where you agree to pay a Buyers agent.

BUT, for the most part in a traditional sale where you are dealing with a home that is listed by another agent, the Seller is offering to pay a certain % to agent that brings a Buyer.
There are some exceptions of course:
1) Dealing with Sellers who are listing the property themselves and may/may not be working with agents.
2) Dealing with Banks- never quite sure what they might be offering either agent.
3) dealing with a Seller that is offering a % to the Buyers agent that is less than what you agreed to pay your Buyers Agent.
*I assume there are a few more that I am not thinking about on a Sunday morning :-)

Let's say you sign a contract with an agent to pay them 3% of the purchase price of a successful transaction. Typically, the contract has a provision where the agent is instructed to 1st try to get the 3% fee from the Seller or listing company. Where you can end up paying for the Buyers agent is if the Seller/listing company is only offering say 2%. Therefore, per the contract you signed with the Buyers agent, you are responsible for the final 1% at time of closing.

If using a Buyers Agent, make sure you ask if his/her % is fully covered by the Seller/Listing Company on the property that you are interested in. If not, you would be responsible for the balance if the property closes and you may want to factor that into your initial offer.

Also, if you do sign with a Buyers agent but you would like to go solo on any FSBO's that you personally find, make sure that is spelled out in the contract.

agree with Jon, get a Realtor (unless you find a FSBO that is not willing to pay realtor commissions).

If you go solo, typically, you are not saving yourself any money.

In Colorado (which I assume how TX works as well), the Seller hires the listing agent for a certain percentage, let's go with 6% for an easy # to use. The 6% is typically split 1/2 and 1/2 between the listing and buyers agent.

By going solo, your not really saving any money as if you go to the listing agent directly and close a deal, then the listing agent gets the full 6% from the Seller. You are much better off having your own representation that is working on your behalf, can negotiate for you, give you comps, recommend inspectors, work with the title company....
If you call the listing agent directly, they will LOVE to work with you as they will not have to split the commission if you buy the house.
Not to say you will not get good service from a listing agent, it just makes sense to have someone working on your behalf.
If you are soliciting FSBO's or contacting owners of homes that are not listed yet directly, that is a different story, but if you are looking at typical MLS listed properties, your generally not going to save $$ going solo as the Seller is going to pay the full 6% commission whether you bring your own agent or call the listing agent directly.

Thanks V.

Was down in the area about a month ago looking around. Coming from a ski resort town (Breckenridge, CO) with resort real estate prices, I could not believe what you could get for the price.
With the # of foreclosures, it seems like the market still has some more softening in prices to come. Agree/disagree?

Whenever we saw a house, I would go over to the fences and hop up to see what the neighbors yard looked like. It seemed like 1/2 of the 3-5 places I could see were either seriously neglected by the homeowner/tenant or abandoned and are soon to be coming to the market. I kind of got the feeling that there is still a lot more inventory waiting to be brought to the market.

Will probably be coming back again to look around as with the prices, hard to pass up.

For those that have, how did you go about getting into transactional funding?
Did you create your own company & then advertise?
Did you lend your money to a transactional lender that was already set-up?

I have been following this thread and others about transactional lending and it seems very interesting but I have yet to figure out how one would practically get started in this type of RE business.

Assuming it is a standard contract, you don't have much of an out as a Seller unless the Buyer does not meet one of his/her requirements (such as loan conditions).

One of the other outs is the Home Inspection. If they object to items that they would like fixed or given a credit for and you do not come to an agreement by the Resolution Deadline (or whatever your terminology is for your contract), the contract terminates (in Colorado, the following day).

Typically, a Buyer is set to perform a contract under the Liquidated Damages clause which means they sacrifice their Earnest Money IF they do not close yet everything else was fine.
A Seller is typically under Specific Performance which means they have to close if all conditions are met or the Buyer can potentially pursue legal action.
The general gist of it anyhow.

As for a creative way out, you can always go to the Buyer and be upfront and say you would like to pursure another contract and offer them their Earnest $$ + $XX amount of dollars (whatever you feel is worth it to you to take on the contract you want) if they terminate the contract. At least I see no reason why you couldn't. Up to you if you want to take $$ out of your pocket if they take you up on the offer.

Otherwise, your only option if to fullfill the contract or play hardball when it comes to the Inspection Objections and then that is not a guarantee that they will back out of the contract either. Might not be a bad idea to let it play out, better to close and have a little money as no guarantee that the other contract that is higher would successfully close.
Matt

I believe that to qualify for the $250K tax exemption or $500K (joint), you have to use the home as your personal residence for any 24 months of the previous 60 months (or 2 out of 5 years).
If you live in it for 2 years, rent it out for 2.5 years and sell, you qualify for the capital gains tax exemption.
You can only use this exemption once every 2 years.
Also, as Rich pointed out, you can live in it for just 2 years, sell and use the captial gains exemption.

For your example, if you lived in it for 5 years as your personal and then rented it out for the following 5 years, you would not have used it as your primary 2 of the previous 5 years and thus you are open to the long term capital gains tax + state tax + depreciation recapture.

If you want to avoid capital gains, your option would be to do a 1031 exchange or move back into the house for 2 years.
Matt

Here is the link to the article
http://www.summitdaily.com/article/20100616/NEWS/100619882&parentprofile=search

Not sure where his info came from.
Matt