I've already completed a transaction that ultimately turned into a "short sale" because the Sellers were less than open about being behind on their mortgage payments at the time that I listed the property. I should have know, though, b/c the property had a tree through the entire roof and was uninhabitable, so was suitable only for a cash Buyer. Hindsight IS almost always 20/20, though. Well, after my title company completed a preliminary title exam, I received a BUNCH of paperwork that indicated that those owners were in trouble; behind on mortgage, contractor's lien from the county, etc. That transaction was a year or two ago. While it was a good learning experience, I determined at that time that pre-foreclosures and short sales were not for me and I've been very careful to avoid working with anyone in that type of situation. At the time, I did a terrific job for those people; got a well-known mortgage lender to come down $15,000 on what they were owed, got an attorney to defer half of what he was owed by the Seller, but didn't get the county to remove any of what they were owed--the transaction was a headache and dragged on and on but finally closed. The Seller had to show up at closing with about $2,500 just to dump the hurricane-damaged property. I view it as a success b/c I was able to help a nice couple out but it took WAY too long, I worked WAY too hard, and got WAY less money than I typically command when working that hard. It was my feel-good transaction of that year.
So, now I am working with a newer agent that asked me to help her with a pre-foreclosure property that hopefully will be a short sale b/c the owner is behind on payments, has a pre-payment penalty, and can't in this market get anything close to what was paid for the property whenever it was purchased. Plus, with any pre-foreclosure property that was recently purchased, it's safe to say that any owner probably owes a lot more money than what he purchased the property for due to attorneys' fees, interest, late payments, etc.; nevermind the marketing fees from a real estate company. Can you say OUCH?! So, for this person, we have all the information necessary and are this week hopefully going to sell this forlorn property but of course we need the Seller's lender approval. I know we can find a Buyer but catering to the Buyer, the Lender of the Seller, the Lender of the potential Buyer, the other agent, etc. is a real hassle. So, let's hope this works! Thankfully, my broker is forward-thinking and has all the back-line phone numbers to almost every large mortgage lender out there for their Loss and Mitigation Dept. No, I don't have them all--I just have the one for this person's lender and for the one I closed previously. My broker and my company saw this issue coming well before many of us even thought about listing/selling pre-foreclosures. There's something to be said for experience in general and for experience with the real estate market cycles, and my broker has both.
But let me get to what this preface is all about:
So, with this pre-foreclosure issue that a LOT of people are dealing with, I am changing my mind and saying, "YES!" to helping people who either made a poor choice in listening to ethically-challenged mortgage people in the past few years or who themselves made a poor financial choice in purchasing a property (or properties--plural) that they simply couldn't afford.
What has been your experience with pre-foreclosure properties; either working with owners or being in pre-foreclosure yourself?? I'm truly interested in learning more and hearing more stories so that others may benefit from the information provided.
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