Your Gain is Their Detriment

I responded to an earlier post and thought this would be a good venue to share my thoughts on Short Sales, Pre-foreclosures and Foreclosures. While the following is relevant to Arizona, you still may find them to be relevant where you are, after all lenders are the same...and most of the lenders I am dealing with regarding these sales are across the country anyway. Most of our foreclosure lists are coming from lenders or title companies. Short Sales and Pre-foreclosures can be a good way for your client to find a nice home for less money. There are some things to think about when buying them and to disclose to your clients.

1. In most cases, the seller or lender will not make any repairs.
2. If you use Seller Property Disclosure Statements, these are seldom available.
   
3. These deals can take anywhere from a matter of days until 90 days for a lender to respond to an offer.
1. Some lenders use negotiators to make the decisions and can be in a timely manner unless they are trying to bid the home higher before foreclosure.
2. Some lenders review the offers during board meetings that may only meet once per month or longer.
4. In many cases in order to complete the buyer inspection the buyer will have to get the utility companies to turn on the utilities under the buyer's name. You may have to get approval from the lender or listing agent to obtain authority to do this.

If you plan on trying to get a foreclosure you need CASH.

Don't plan on getting a Warranty Deed either...you will obtain a Sheriff's Deed and will not have the right to quiet enjoyment in which a mechanics lien could pop up or some other cloud.

Finally, where someone is getting a great deal another party is getting HOSED. The harder you beat up the value of the home will affect the Neighborhood Value and the Sellers. I know not many people think about the seller under these circumstances,but remember they will be getting a 1099 from the lender for the deficiency on their loan. This will include commissions, attorneys fees, transfer fees, liens and the primary lien mortgage. And they will not get out of paying the taxes on these monies to Uncle Sam.

Try to have your clients be fair.