My RE agent says Pre-foreclosure can't be assigned...uhh??

Hello:
First, I need to tell you that you post made me mad as hell. I am not one who sits well with being told by someone who probably has never done a investment property deal that something cannot be done.

You can assign a pre-foreclosure just as you can any other property. The seller is still going to get the monies that are due to them or in this case the mortgage company, bank, etc.

The best scenario is going to be where you have a qualified end buyer lined up who has committed to buying the property. This would allow you to buy and assign using transactional funding.

The second best scenario would be to get in touch with the listing agent and pitch your offer.

but assignment contracts don't have to be accepted

I've run into this with some properties I was looking at in the ATL and in Memphis; assignment contracts are not allowed or will be accepted

Its entirely up to the person in control as I believe

That's exactly where I was focusing on Elix...in the ATL. So you're saying that the agent maybe right about this? @ Jimmybtx...what you're saying is I can still get the properties under contract as long as I have an end buyer lined up using transactional funding? But would it be ok to advertise the property on the net or would that be an agreement between the Seller and I?

and as far as I go, the last three houses I looked into when I mentioned assigning the first thing they all said was "graziosi??" "you read graziosi's books too???" "that's graziosi's thing right???"

I think more people know about assigning than most would believe. I think the main opposition is having the home tied up. Just have to find a realtor or owner willing to do it.

If you're looking for props, look over by Clark Atlanta and Morehouse; homes up the wazoo for sale,.....or rent. But would be willing to sell.

Here is how it works with transactional funding. You need two agreements, referred to as the A/B and B/C. The A/B is between you and the seller. The B/C is between you and the end buyer, which is generally either a investor or person buying to occupy. They must be qualified. This means that either they have placed the funds to close in escrow or have a letter of approval, not letter of preapproval. It must be a letter of approval.

Transactional funders fund reo's and short sales all the time as well as fsbo's. The advantage to getting it as a preforeclosure, before it goes through the foreclosure stage is that you do not have to come to a auction with a cashiers check for many thousands of dollars.

Thanks for the insight Elix...I'll definitely take a look into that part of town but do you have any success with pre-foreclosures in any other states? @ Jimmybtx...I do have an idea how transactional funding works, thanks though, but i know some sellers maybe embarrassed that their property is up for foreclosure and being advertised all over the internet. But like Elix said, it's up to the Seller if they agree for me to do this. Do you have any success with pre-foreclosures in your state because the ATL looks a little bit steep?...even though it look like it still can be done. Thanks.

D'Angelo

You are correct, it still belongs to the owner. I have come across many sellers who think because they lost their job two weeks ago and are going to miss the next mortgage payment, that they are in foreclosure.

A person is not in foreclosure unless a notice is posted at the courthouse attesting to that fact of occurence.

In this banking climate, many lenders will work with a homeowner until there comes a point in time that they can no longer work with the homeowner.

Of course, some banks just won't work with anyone and foreclosure is going to be automatic.

Here is where investors struggle with a deal. They get opportunities to buy 0 equity homes all the time. A homeowner is so upside down that the deal is not worth pursuing.

The only way to force enough equity to make the deal worth doing is to get a short sale approved. A bank will generally only approve a short sale if the amount of monies they will receive is more than what they could get at a auction or through working with the homeowner.

Justplain-e, that was my thought from the get go. The owner should still has control over the property, not no lender or banks, because it's actually not gone into foreclosure as yet. Thanks for your input.

I would locate a young newbie agent who has one focus and that is to make a deal happen and make money.

I find that the agents who have been around awhile, act like it is their deal.

Here is what I do and I always do what I say I am going to do in a deal. I give the agent one opportunity to present my offer. I always will call the listing agent and ask if they seen my offer. If they say yes, I explain that I always do a follow up and it is just a course of business and I thank them for the opportunity.

This makes me look far more professional than others. Now if I hear no, I call my agent within minutes and I do the same thing, but different.

I say, I am doing a follow up to see how the presentation went. If they say fine, then I say cool beans, thanks. I know your busy and I will let you go.

I then call the main office number and ask who the broker of record is and what is their email address.

I then send a email to the broker of record and cc it to my agent and here is what I say:

Dear Sir/Mam:
I have been working with , and up until today, it has been a nice working relationship.

I recently made a offer on a property at , and when I did my customary follow up with the listing agent as to the status of receipt of my offer, I was informed that no such offer was presented or received.

I waited 72 hours from the time I presented my offer to my agent to do my follow up, which is a reasonable amount of time for my offer to be presented.

I have no reason to believe that the listing agent would say to me that they did not receive the offer if in fact they did receive it, especially when I also made a immediate follow up with my agent from your office and was informed that the presentation in fact went well.

As you are aware, a real estate agent has a obligation, almost a fiduciary duty to the seller to present any and all offers on any property, whether they like my offer or not. It is also a law through the state board of realtors.

I am going to give you and your agent three hours to present my offer and I will do a immediate follow up to ensure that my offer has been presented.

It is not up to your agent or anyone in your office to make a determination as to the outcome of my offer. This is the business of the seller and myself, facilitated through the listing agent and my agent.

I am also going to personally make contact with the state board of realtors for your state and file a formal complaint.

My phone number is and my email address is.

Thank you for your time and assistance.

This works and I have had to do this atleast twice.

Hope this helps.

Pre-foreclosure is a term used when a homeowner is behind on their payments(approx. 3 to 6 months) & the bank files a law suit against them for default, the appears on the county clerk's records as lis pend...for the homeowner to sell the property now, they would still have to pay off the mortgage, plus late payments, interest & penalties. A short sale is where the bank will allow the homeowner to sell the property for less than what is owned
on the mortgage,(this usually must be due to proven hardship) but the bank must agree to the amount. This approval is why it usually takes 3 to 9 months to complete a short sale, because the property is not the bank's yet, so from an accounting stand point they don't have the "red ink" on that loan. They are more concerned with the properties that they have already gotten back as foreclosures, those they own, & it's red ink/bad loan.
Now if a homeowner is only behind 1 to 3 months, then this is the Greg Murphy opportunity to do a sandwich lease...you the investor get the owner to allow you to take over his payments & make up the back payments(remember he was planning on loosing the house anyway)...then you find a tenant-buyer that
gives you a deposit(that is several hundred dollars more that the back payments) & pays you rent that is $ 100 to 200 more than the monthly mortgage
payment.
Remember, that when a house goes to the county auction foreclosure sale,
the bank usually buys it back for $ 100 because they are the plaintiff & wants
the full judgement amount at the sale (judgement= amount of the mortgage, late
fees,interest, lawyers fee, etc,) so on a 100,000 mortgage, the judgement can be 120,000 to 130,000). Plus, you have to pay for the property in full that same day with cash or a cashier's check.
We have bought several vacant lots at county foreclosure auction, back when the judgements amounts where less than what the property was worth...but now most judgements are way more than what the property is worth.
On some occasions, the listing realtor of a short sale does have an approval letter from the bank stating what they will accept on that property.
After a bank gets the house back, they listed with a broker, goes onto MLS, & is sold to the highest & best offer.

Wow, this looks a little more complicated than I thought. I think i'll stick to my FSBO's for now until I get some deals under my belt and then i'll probably venture in the pre-foreclosure world. I'm going to bookmark this thread because it contains some "valuable" info which I can rock back on in the future. Thanks soo much family...God Bless!

D'Angelo

Hello, I am new to real estate. I was reading your post and was amazed because you all were talking about Atlanta and that is where I live. You all were talking about properties in the same area I bought my property 3 years ago. That area is up and coming with the addition of a brand new elementary and high school. Also Morehouse College is adding two more buildings and construction is crazy over there. I would like to find out more information from you two. I look forward to your response.

Most of the homes over there quickly get bought up quick fast and resold, but the deals normally come with the cash buyers.

I purchased over by Morehouse and down the road from Tech in the heat of the boom area where you could work at Picadilly's and buy 5 homes in a month no problem.

I got a dude down there that I can place you with.

PM me and we can discuss more

I agree that the Atlanta market is going to always be a hot market. I have looked at Forest Park, College Park, Atlanta as well as Marietta.

A very nice range of pricing.

It sure is...that's why i'm working and hoping to snatch up deals over there.