sheriff sales

[beginnerbob]

after a property has been scheduled for a sheriff's sale, can I still buy it from the owner of the loan?

[rgchamb]

Sure you can.  When the title search is performed, the taxes owed will come up & these have to be paid out of the transaction funds.  Of course, just make sure closing is before the tax sale.

[reiauctions]

When you say "owner of the loan" are you talking about the lender?  If you're talking about the lender you can not deal directly with them.

You still need to by from the homeowner but you can get an authorization from the homeowner to speak to their lender about delaying the sale.

[beginnerbob]

yes, I was talking about the homeowner!  And I do appreciate your responses.  Thank you very much.  I'm trying to help the owner out now.

[Mellon_Head]

If your trying to work with the homeowner the state in which the property is located may help to determine if there is a "user friendly" right of redemption.

If you please, what state is the property situated and has the foreclosure auction been held yet?

[RealityCo]

in michigan there is 6 mos to 1 year redemption period unless the property is deemed abandoned, then it is only 30 days.  You can still purchase the home from the homeowner even after the auction or sheriff's sale as long as they are within the redemption period.  the redemption period should be posted on the legal notice in a local paper or on the notice of the sheriff's deed/foreclosure papers.  I think most states dont offer that long so do your homework first to be sure that the home owner is still within the redemption period first.

[Mellon_Head]

You bet. Michigan has the most permissive right of redemption in the nation. RealtyCo, do you work the right of redemption? If you do not, might you explain to me why?

[RealityCo]

hi mellon...  i do not work the right of redemption and only because i dont have cash. 

believe it or not I am the ONLY one who ever goes to the sheriffs auctions in my county and would love to purchase some of these right from the bank but they require cash within one hour of the auction and i dont have that kind of cash. 

i would love to get into buying preforeclosure or making deals with the person in foreclosure but my hands are tied by the banks as to how many deals i can do at the same time.... (which really sucks because i could be rolling in it)

all the properties that we have done we have had to do them either with a bank or our own money and that only goes so far.  if you have any tips to finding some private money, believe me, im all ears. (eyes)

[Mellon_Head]

Where you aware of something called "redemption paper"? It's the bank selling the mortgage, note and final judgment of a property that they prevailied at the sale on and they (the lender) have to wait for the redemption period to run. The lenders usually sell this paper at quite the discount (.70).

My other idea to work redemption paper would be to attend the sale and approach the homeowner when an investor prevailed (thereby indicating a deal of some sorts). Do investors EVER prevail in Michigan?

You should have investors (hard money guys) lining up to do deals with you.

[newdevelopment]

If I am trying to get a property after the sheriff sale,  how do I explain to the owner that they owed $100,000 but now the bank is only asking $30,000?  I want to pay $30000 and give the owner some $$$ for there pockets?  They have had some examples of this in the Detroit Legal News.

[Mellon_Head]

I'm not suggesting that this idea will work well in a short situation. As I have previously stated, my home state (Florida) does not have much of a redemption period (about 4 hours) However, with that said. Here is a senario I think might be workable.

Property value 100K- FJ 55K- Investor purchase at the sale 75K- You
approach homeowner during redemption period- offer to purchase property from them (using whatever instrument would be appropriate during the redemption period for the transfer of title) for 65K- payoff FJ 55K- Give 10K to the homeowner-sell vacant property to foreclosure sale investor for 75K he offered at the sale-10K for you.

This would also depend on the existance or non-existance of any junior lien holders as well as the existance of any surplus fund statute in your state.

In re-reading my answer, I would need to think this through more before I could try it. But you get the idea?

[newdevelopment]

Thank you Mellonhead for your response.  If they do not know that the bank will take less than what they owe do you tell them.  I will pay off you mortgage and give you 10k or I will buy it for the price the bank wants and give you 10k.  I guess my question is do you tell them what is really going on or not?

[Mellon_Head]

My motto is (or is something like) always keep the homeowner in the loop and always speak the truth. Miscomunication and fibs have a way of catching up with you. Well, not you, but everyone.

In re-reading your response, I guess you could explain it the way you felt most comfortable with. Because in both of your examples you are speaking the truth.