The home I really want to make an offer on is said to be in pre foreclosure. The preliminary title search I had done does not list any NOD or judgement. The agent I have been talking to said that she heard the owner has just had one contract fall over, but doesn't know why. Will my offer, if and when I make it,(there are some other issues I have to sort out first), and assuming no NOD, need lender's approval?
2007-06-15 05:58:16 · 7 answers · asked by LucyJ 1 in Business & Finance ➔ Renting & Real Estate
I can't think of any situation other than a proposed short sale or where the house is an asset protected by Federal bankruptcy, where you would have to consult with the seller's lender if the seller accepts your offer.
As long as the offer exceeds what is owed to the lender(s) and the seller is happy then its just a normal real estate sale and purchase. I think that's what all the others are saying too.
It's likely that you won't have enough information to know whether there is any loan in arrears if a NOD hasn't yet been published. So when you meet with this particular owner and make your offer it's best to ask up front if it will need any lender approval. All your dealings at this point will be with the owner, as you need his written authorisation to talk to his lender anyway.
2007-06-15 10:05:13 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If you make an offer on a property the seller must approve the offer. It does not make any difference if the property is owned by an institution or a private person. So if you are referring to the lender needing to approve the offer yes if they are the owner.
Now if you are speaking of your lender approving the offer, well in a way they have to because depending on your credit report the lender will offer a certain percentage of the mortgage and you must make up the difference with a down payment.
The only way you don't have to make a down payment is if you are approved for a 100% loan.
If the house is in pre-foreclosure you can make the offer to the person that is presently in the house and no the current lender does not have to approve the offer.
The only way your offer will be turned down is because the current owner did not accept it.
You have to close the transaction prior to the foreclosure sale date or get an extention from the current lender.
There are lots of things to consider when purchasing a pre-foreclosure.
Get a contract, take the contract to a closing agent, make sure you ask for and get a preliminary title report. This report is issued by a title company.
Look it over very carefully for additional liens, taxes that are owed. Taxes should be paid by the current owner and you should only pay taxes from the time you possess the property.
If there are additonal leins make sure they are contacted and paid off during this transaction.
A few real estate agents are well versed on the matter of selling foreclosures, most are not, so make sure the agent you are using understand the foreclosure procedures in your state and the time frame in which you have to work in order for this transaction to work.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-06-15 06:16:59 · answer #2 · answered by loanmasterone 7 · 0⤊ 0⤋
If your offer is for less than is owed on the property, yes, it will need lender approval, since they hold the lien(s) against the property. If you offer more than is owed and the seller can pay off all liens with your proceeds, then no approval is needed, or if the seller can come up with the difference in cash (doubtful if it's close to foreclosure.)
2007-06-15 06:09:16 · answer #3 · answered by acermill 7 · 0⤊ 0⤋
You have to make sure that you can be approved for a loan on the house, other wise the offer is meaningless. Now, if you're also talking about the real estate agents loan company, you'd be better off going a different route to make sure you're getting the best rate.
If you are in a state that i'm licensed in, I would be more than happy to help.
2007-06-15 06:04:32 · answer #4 · answered by Anonymous · 0⤊ 0⤋
First, you need a signed contract with the seller.
If it is for less than what is owed on the property, one of two things will need to happen
1. the seller brings the extra money to the closing
2. the bank accepts less than what is owed. (lender approval needed)
if neither happens, the contract falls over.
2007-06-15 08:12:07 · answer #5 · answered by PersonalFreedom 4 · 1⤊ 0⤋
I don't know where you are so this may not be the correct answer for your state. Here in Florida, an offer to purchase a property in preforeclosure would almost always require the financing to be in place before the offer could be considered.
2007-06-15 06:07:53 · answer #6 · answered by exitbrian.com 2 · 0⤊ 0⤋
I would only add that sometimes lenders will take short pay-offs i.e. they will allow the house to be sold for less that what is owed.
I am a mortgage broker
2007-06-15 06:14:22 · answer #7 · answered by John N 1 · 1⤊ 0⤋