OfflineI have seen many posts regarding the Right of Remption period for foreclosures, and how there exists confusion about whether it exists in a certain state....or not. As Anita says, the crazy states of AL MS and LA do have right of redemption. We realize that only about 1% of owners will redeem their property, but for those investors who buy a 4closure with the knowledge that they will not only have to rehab the property; but also, make major improvements do worry about the owner possibly redeeming the property at the forclosed on price. For example, an investor buys a 4closure for a total of $100,000, and in order to make it marketable he adds $20,000 in improvements. For conversation sake, the property now has an FMV of $250,000, and he sells it for #200,000 "before the redemption period is up". An unscruplous investor sees this and runs down the original owner and helps him redeem at the $50,000 plus price. This may seem make believe to many people, but make believe happens in real life.
A trusted and experienced investor told me that in those cases which mirrow the above, where he is turning a pigs ear into a fancy purse, he will actually contact the owner and pay him to sign a waiver of redemption on the property before he buys the property.
I ask that any of you successful DG'ers please let us know if you have every thought about this issue, and have you ever utilized the waiver of redemption and under what circumstances? Thank you so much for reading and posting any information that might help us newbies who are considering REO's'.
Steve
Steve
We seldom get what we want, but we will always get what we expect.
This is a good question and I hope you get some answers on this.
But is this FSBO or if it is with an agent, is the possibility the same?
And could this be possible in all the states? Or how do we find out?
Thanks for this thread!
Sandi
There are so many things that probably wont happen...but they could. This pertains to 4closures primarily, but I hope Rina, Sissy, Carol and some of the "old" masters (LoL) will help answer this question. Im sorry about your accident and your losing your best 4 legged friend. I know how much you must miss him, cause I too lost my golden retriver to a car accident and it broke my heart. But my advise to you is get another pooch as soon as you can. I adopted a mature female lab, totally different pup but she did help fill in the void left by Lilly. I enjoy your post immensly and hope all is going well with you. Btw, are you sure you want to see another house from yours?
Steve
Steve
We seldom get what we want, but we will always get what we expect.
Maybe putting this back on Monday may help. Sundays usually are slower on here.
And though I used to be a football fan, don't watch as much anymore....but I do live in Packer country!! And many are watching the playoffs.
I have heard of the redemption for owners but never have known anyone it happened to. I may even ask my REMAX agent, as he does a lot of foreclosures.
Just don't understand how that can happen if "legally" the bank owns it.
And maybe a lot of owners didn't realize this.
I will send you a PM in answer to yours.
And for the record, I can't stand being without a dog. She was so loyal to the end but cancer took her, and I sat on the hill by the barn and held her as she passed away! And will explain to you why I am forced to wait on another.
But will be in touch with you.
So let's hope for some input on this thread. Especially good to know when we look at places foreclosed on out of our own state.
Sandi
I lived in Neenah in 1969, Bart Starr was from AL so GO Packers. Thanks for your advise on the Sun post. I look forward to talking to you more.
Steve
Steve
We seldom get what we want, but we will always get what we expect.
Did chuckle about you asking if I really want to see another house from mine.
Because I was sitting outside with a friend and as we were looking across the fields I thought I saw a house going up. He said it was, and I said, it better not be!!
Ran and got the binoculars and saw a house being built and knew I had to move!!
I really don't like having close neighbors.
Well, better go turn on the Packer game.
Sandi
In Michigan owners have a right to redeem the property from 6 months to 2 years depending on the size of the property. A bank foreclosed on a owner after six months but did not force the owner to move, because in this case the size of the property was large enough to take a year for redemption. However can the owner sale his rights to redeem and allow an investor to buy those rights. How do you stop the bank from taking the property? Pay the redemption amount and/or if the bank will let you, pay a negotiated amount and the previous owner keeps the mortgage on him. Anything is possible. What to do? Chiller
questions I have, and I wish I could help you but Im not knowledgable about this. If I were ypu, I would start a new thread and ask the questions you have. There are guys/gals on this site that can answer them. Best of luck to you.
Steve
We seldom get what we want, but we will always get what we expect.
Thanks Steve for your response,the question I have will come out in the wash I guess. Maybe somebody will see it and comment. Chiller
We were just discussing the ROR period Monday night at my REI Club meeting. AL is pushing to shorten the length from 1 yr to proposed 90 days but talk puts it probably settling at 6 months realistically. But hasn't been passed yet. I think the cleanest thing to do is pay the owner to waive their rights. I would definately not sink $20k into a property that was still within the ROR period. It states that necessary repairs can be reimbursed plus the interest penalty if the owner chooses to excercise his right. But doing a full retail rehab would not. Allowable Ex: roof repairs, fixing a busted pipe, etc. Only to include immediate repairs that are deemed necessary. Not capital improvements. With the ROR in effect will deter an end buyer (& funding) due to it will not pull a clean and clear title (clouded) until ROR is waived or expired.
The investor I was speaking with Monday night (which a a new buyer for me - whoohoo) buys at auction. As he indicated the only real concern for ROR is if you are trying to flip the property. If you are planning to hold and rent, he said in 10 years of buying he has only had one try to excercise their rights to redeem. But in order for them to excercise they have to pay the default amount plus necessary repairs and 12% interest. They were unable to cure.
I'm definately not giving legal advice because I'm not qualified (LOL) but what I am going to find out is if it goes into foreclosure and at auction opening bid is at $50k (default amount) and say the investor pays $75k on a property worth $150k (or whatever). If the homeowner does redeem I BELEIVE they are able to redeem at the $50k plus necessary repairs and interest. That amount in excess to investor is forfeited. (that's what I have to confirm though).
So do thorough discovery, buy right, plan well and have exit(S) in place.
Bottom line, look before you leap!
God bless,
Jen
In order to stop the previous owner to a ror the investor has to get a qcd or some instrument of buying the ror and record it. In Michigan, the next step is to satisfy any liens or taxes. My only problem is how to find the bank or mortgage co. to satisfy their interest and buying after the redemption time. Some of these banks can be difficult to reason with in these times. Chiller
its the easiest to do is pay them (they need the money) and as mentioned it is RARE that anyone exercises the ROR
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
things like you do". Seriously, great post and in this situation I believe extra caution must be taken. Too much to lose without all possibilities covered. I told you Chill, there are some good mentors on this site. And as for you Jen, I guess you will have to place a disclaimer on your posts like Billy has. But in my opinion, you are def a much prettier version of Pholly!
You both are great assets to us DG'ers.
Steve
We seldom get what we want, but we will always get what we expect.
confirmation from you and Jen of what my investor told me. And, Chiller, I would recommend you also getting your RE lawyer involved to confirm what actions you should take based on the state in which you are buying. Best of luck to all.
PS: Jen, I meant to include "much younger" as well as def prettier than Billy. LOL
Steve
We seldom get what we want, but we will always get what we expect.