All Forum Posts by: Sean Dougherty

I am an investor just starting to get into the market of purchasing pre forclosed homes. I just wanted to get a few things clarified before I start approaching or sending letters out to distressed home owners. I have a few questions here and will list them all in one post instead of separate ones. Please give answer to any or all of them. Thanks a lot,

Question #1: The reason to purchase a home in default is to make a profit by getting the home at some what less than market value. I am offering the current owner cash and a chance to walk away with little damage to their credit and an option to not lose the home to forclosure and get NOTHING in return. But why would the home owner consider selling to me when they could do a shortsale with their bank and get closer to market value for their home? What am I offering that would not also be available doing a shortsale through the MLS?

Question #2: If I were to make a deal with a distressed homeowner would all transactions be identical to a short sale? Meaning would we need to contact the lender, get the price approved? Would lender order an appraisal or BPO to approve price? Would it take the same amount of time as a standard short sale through MLS?

Question #3: Many homes in preforclosure I am looking at, the owner owes more than the home is worth. In standard short sales the bank forgives the difference. If an owner owes $400,000 on a home that is worth $250,000 would a bank ever accept an offer $230,000? Or should I be searching more for homes where owner actually has some equity?

ON 10/30 I made a full priced cash offer on a pre approved short sale. The listing agent has assured me that as of now mine is the only offer that has been submitted to the bank. She was confident that deal could be closed in less than a month. Now a few other issues have come up. I will list them here and ask for any advice concerning any or all of them.

1) Listing agents said we were only dealing with one bank in this transaction, but after some more research it seems that Fannie mae is also involved as an investor. Supposedly the bank had approved the previous offer but the buyer walked before it could be approved by the investor. So any offer would need the approval of bank and fannie mae? How likely is it that Fannie mae will approve price if the bank already has?

2) If the bank has pre-approved this price just 2 months ago, what is a reasonable estimate of how long it will take for the bank and the investor to accept my offer? And is it possible they will not accept it even though same priced offer was approved by bank 2 months earlier?

3) Now I come to know that this home has been scheduled for forclosure on 11/22. Listing agent says she is confident deal will close before then. And if not the bank will delay forclosure date to give us time to close. Is this accurate? Is there any way to assure it will not be forclosed during escrow?

4) Last question is. Listing agent says she is confident offer will be accepted within a week, It has been 9 days. Forclosure date is 12 days away. What are the chances of offer being accepted opening escrow and closing deal before then? Listing agent was confident it could happen. Please give your opinion. I am purchasing home in Vancouver Washington. Bank is Chase and investor is Fannie mea. Thanks so much for your help.