All Forum Posts by: Edward Briley

 I guess I made a mistake, maybe I have been told they bid them up to what is owed.  That is not even so, I know a property that the bank started the auction for a property for what was owed on a property.   Matter of fact many years ago I had a home foreclosed on that sold for more than what my first wife and I owed against it.  The buyer was  a private entity that had looked at the property when it was for sale for $10,000 less, and that is a fact jack!!!

@Rick H. and the additional postings there. I have made an appointment with the attorney that does my closings for me. I am going to ask what he will charge to do pre-auction title searches. He has done good for me in the past, making sure that all properties I buy have their own LLC. He also looks after me for making sure that I buy the proper amount of title insurance on my properties. I think this is the safest way for me to bid on properties at auction. If I can get this done economically I will try it. However, after talking to some of my real estate agent buddies that the best way to buy is REO properties. Now I don't know if it is true or not, but they tell me that here the banks will bid them up higher than what is owed on them in many cases. I am also told that some banks will auction them, list them for awhile, and if they don't get a good offer that they will try to auction them again. There are stories, that people have bought the same property is an REO for a lot less than they could have bought them at auction. These stories may be true, in which I am sure many are, however, I am still willing to bet that you can get better deals buying properties at auction.

Now I am asking this rather than starting a new post.  Now the wording in the ad reads this: 

TERMS OF SALE: A non-refundable bidder's deposit of $5,000.00 or 10% of the sale price, whichever is less, by cashier's or certified check required at time of sale, except for the party secured by the Deed of Trust. Risk of loss is on the purchaser from date and time of auction. Balance of the purchase price must be paid by cashier's check within 14 days from sale date. Except for Virginia Grantor tax, all settlement costs and expenses are purchaser's responsibility. Taxes are pro-rated to the date of sale. Purchaser is responsible for obtaining possession of the property. If purchaser defaults, deposit may be forfeited and property resold at the risk and cost of the defaulting purchaser who shall be liable for any deficiency in the purchase price and all costs, expenses, and attorneys fees of both sales. If Trustee does not convey title for any reason, purchaser's sole remedy is return of deposit without interest. This sale is subject to post-sale audit of the status of the loan secured by the Deed of Trust including but not limited to determining whether prior to sale a forbearance, repayment, or other agreement was entered into, the loan was reinstated or paid off, or whether the property became subject to an automatic stay under the U.S. Bankruptcy Code prior to the sale; in any such event this sale shall be null and void and purchaser's sole remedy shall be return of deposit without interest. Pursuant to the Federal Fair Debt Collections Practices Act, this law firm is a debt collector attempting to collect a debt and any information obtained will be used for that purpose.

Now in my opinion, if the language is stated like above, I would think that you would be covered if there was another lien on the property.  

Am I mistaken?

I would not do it.  However, I do know a case something similar to this that has worked out, but at the same time it was a cash sell to the buyer from the owner.  No bank was involved.  It was also commercial real estate.  In this case the buyer bought a retail property, that was split into 2 spaces.  The owner of the property had to sell the building because the parent that owned the property had passed away, and all of the siblings wanted their split.  They placed the property for sale, in at that the only way the owner would sell it is that they would allow that tenant to continue leasing the property for the next 5 years.   It sold within six months and the leaser, prior owner of the property, signed a 5 year lease for monthly rent for more than the buyer could get from another tenant.  So, after this the new buyer went to the bank, borrowed 100% of the cost of property he paid, and the prior owner/tenant, is paying more for rent than what the mortgage is on the property.  Plus the new owner has rented out the remaining space and is seeing a decent income on that space as well.   So, in some cases in a situation that I explained can work out providing it is a cash sell and under the correct circumstances.   I thought about buying the property myself, however, I did not have the foresight in doing it. 

Spoke to my attorney this morning, and actually every bank owned home, including Fed properties I have acquired has had the same type of language in them.  I am sorry, I guess this time I only really looked at the language closely because they had it  in such large print.   He told me that the only real reason that they insert it, is in case the deed has a problem with it.  So, full steam ahead.  Hopefully I will close, late next week.  They are still bound by the contract with you if someone offers more for the property.  However, they could break the deal with you, but it would not be in their best interest to do so, and there still may be legal implications for them if they do.  It is crappy in everyones opinion, but you don't own the property until they get paid for it, and you are given a clear title.  Just to give you an idea, in which I have known, that a quit claim deed is not a 100 percent guarantee that you actually own the property either.  For this reason and many others is why Title Insurance exist. 

@Elizabeth Colegrove  Well the first thing I am going to do is rewrite the addendum so it favors me, not them,  sign it and send it through and see if they catch it. 

@Elizabeth Colegrove  I have never seen this language in a contract before, and if anyone would agree with it, after the seller has agreed to sell the property and you have met everything they have asked for, you are a fool to sign it in my opinion. I have good enough lawyers to take care of this.  Matter of fact a Realtor would be a fool to even list the property for sale.  They agreed to my offer to sell me the property under their conditions without disclosing this.  Only when I go to ratify the contract they want to add this.  I don't think so. 

I am very ticked off. I made a full price offer on a bank owned property, and the only thing I asked is for is a home inspection, and moisture/termite inspection at my expense. The offer was excepted, with the exception that I had 3 days to have them completed, and that I give $1,000 in EMD in certified funds.

I buy properties here and there, and did what was asked. Even though the realtor knows that I have always have a proof of fund letter with them on file all of the time. I went to the bank got the certified check and I am lucky enough that I can usually have the inspections preformed the same day I request them, because the companies I use do a decent amount of business with me. Yesterday, now, I had the inspections performed, and they satisfied me.

Went back to the realtor so we could do the reconciliation of the contract, and I get back an addendum from the seller. Everything else in the contract is basic, except the following:

13. SELLER SHALL HAVE THE ABSOLUTE AND UNILATERAL RIGHT TO TERMINATE THE CONTRACT AT ANY TIME PRIOD TO AND INCLUDING THE DATE OF CLOSING, WITHOUT CAUSE, UPON WRITTEN NOTIFICATION DELIVERED TO THE BUYER OR BUYER'S AGENT.

IN THE EVENT SELLER EXERCISES ITS RIGHT TO TERMINATE THE CONTRACT, BUYER'S SOLE REMEDY SHALL BE TO RECIEVE A RETURN OF BUYER'S EARNEST MONEY DEPOSIT, AND THE PARTIES SHALL THEREAFTER BE RELIEVED OF ALL OBLIGATIONS UNDER THE TERMS OF THE CONTRACT AND ALL ADDENDA.

Now don't get me wrong, I think I am getting a good deal on the property. However, I am out of $400 in cash, because I paid the inspectors in cash. Plus I had to start the title search etc... in which should be done within 7 days. Normally I close a property within 7 to 10 days, when I pay cash, even though I ask for 30 days, because who knows what may come up.

I set up a separate LLC for each of my properties.

Now, first of all if they find someone else to buy the property for a higher price, before I can close they can terminate the contract, and I am out of the money and my time, and not to mention the realtors commission. I cannot see how they can throw this addendum into the contract after they have already accepted my offer. Matter of fact, I cannot see how they can throw any addendum into the contract.

Basically when they accepted my offer, and I agreed to the terms they offered, that it is my property, the only way that I could not get it is that they would not be able to offer a clear title, and if that is the case, they have committed fraud, for listing a property for sale, without disclosing that information. I wish I could sell a property in put this language in it, and be able to get away with it.

What do you all think?

@Mark Ferguson Maybe about the agents with the same broker may be misleading.  The first agent I had with them was the Broker owner.  I purchased my home from him.  When I started looking for investment properties, it was my idea that I use a new agent from his firm, so they could learn.  She sold me a house, and I flipped it, and had her sell it for me.

She did make some good money with that.  After that, I never heard from her, and bought another property from a listing agent in another firm.  The commission was so small with that, that I felt it was the way to go.  When I started looking for flips again, I contacted the broker of the firm, and he had sold his agency to another firm.  I found out then, the agent I used was no longer selling real estate.  So I asked him if he would give me another agent, because again the commissions would not be that great.  He has done this, and I have hopes in this working out.  The problem I have is that if I did not know this man, that it would be nearly impossible to find an agent that will help me.   So, really today I do not have a problem, with the exception I am going to be charged for every contract I submit, or every closing.  The prior brokerage owner has no control over this, and doesn't agree with it himself.  Now there are many agencies to choose from here.  However, at the same time when I call the listing agent of a property I would expect them to respond, and at the very least show me the property, rather than putting me off, or expect me to sign a paper stating that they will represent me in further real estate purchases for the next six months, and if I refuse, they will not submit my offer.  This has happened to me.  I made an offer on a property, and the property sold for less than my offer that I submitted 2 weeks prior.  I called the seller on this, and they stated the offer was never submitted to them.  If it was a private entity, I would have pause with this, but it was a government agency.

Now basically the same thing I am sure.  I had my agent submit an offer for a property, and what I got was not to bother the listing agent with anything less than a full price offer for the property, because he would not accept it.  I do know that the real estate agent represents his customer, however, they are required by law to submit any contract I give them.  I even had a real estate agent to tell my agent that he would not accept a contract, because he had a verbal offer for a property, that I was offering full price for.    Now normally this would not bother me, but these are repos form the easiest government agency to buy from, so I know I am being jerked around.  I have had contract rejections from them before, but they were always signed, and I have not seen the returned contract is of yet, and don't expect to.  If I start the complaint process with this government agency, I would doubt if I could ever get any real estate agent to represent me.  So what is going on here is that real estate agents must be doing one of two things.  Only selling to people they know, or buying the properties themselves.  If they refuse to show the property, they are doing one of the two.  If the offers are never showed to the seller, I am sure very good deals are happening everywhere, and I am very sure this is happening.  Now I am not known here for making low ball offers.  I am not the guy that went to a real estate seminar offering a few thousand dollars for hundred thousand dollar properties.  My flips are outstanding, and my rentals are better than average. I am not a slum lord.  My offers are what I can make money on.  If I invest one hundred thousand dollars I expect at least a 20% return, after everyone else is paid.  I don't think that is asking too much.  After all a real estate agent makes 3 to 6% and only has to spend a few dollars in listing the property. 

Hey you all, and even myself gave me an idea while reading the post.  I have been buying houses, and getting them to basically decent to rent them out. This takes at least a week to do.   I am going to use my "For Sale by Owner" and place it in the front of the home while I am working on them.  If I get an interested buyer for the property, and can make a profit, I will sell it rather than rent it.  Hey, if I can make at least 10 grand in a few days, and only do some cosmetic work, that is the way to go.   If a contract buyer wants more, I can accommodate that also.  Here the real estate market is really bad.  Their are many that want to buy homes, however, unless they have stellar credit, they cannot get a mortgage.  The real sad part about this, is that this is a military area.  Many repo's around here do not need any work.  The ones that do are hard to find that will flip fast.  I really believe that the problem with selling real estate here, is more the agents than anything else, because they are in constant battles to obtain their next million dollar listing.  A two hundred fifty thousand or less home is not worth their time.  And when you put one up for sale they will tell you that you are better off renting it than trying to sell it, unless you are willing to finance it yourself.  I am thinking about moving to Detroit for a while.