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Wednesday, August 31, 2005

Old Neighbor in Preforeclosure

This is interesting! Last night, I was going through some preforeclosure listings and came across an address that seemed very familiar: it is across the street and about 2 or 3 houses down from the house I used to live in about 2 years ago! I never met the guy living there, but I know the neighborhood and the houses and they are both pretty nice.

From what I can tell, this property is not yet listed in the MLS, so the owner may not have an agent yet. I'm going to send him a letter today and hopefully, if he does decide to sell, I can do it without an agent, thus saving him some money on commissions (which, of course, means I don't have to pay as much).

I did some research on him this morning and it looks like it's the second mortgage that is foreclosing. He bought the property as a new home from the builder in 1995 and refinanced once in 1997. The home owner's association also filed a lien against the property in 2004 for about $2,000 in unpaid fees and took him to court to get that paid in 2005. The civil judgment hasn't been released yet, meaning he still owes them. With late fees and court fees, the amount is now around $2,800.

So my letter will emphasize that I used to be his neighbor, that I can buy his house quickly if he wants to sell it, and that he can save some big bucks on commissions by dealing with me. If I don't hear anything back in a week or two, I'll send a follow up letter. I sure hope the closing on the house I am selling now goes smoothly. It's scheduled to close on 9/16. If all goes well with this guy, I may need my cash by then!

7 comments:

Richard said...

Good luck with your old neighbor... I hope you two can do business. Sounds win/win to me.

Brad said...

Interesting. Where would one find a list of preforeclosure listings for their area?

Shaun said...

There are companies that sell that information. (Usually some of the ads on this page point to companies that do that.) But if you want the freshest leads, go right to the source: check your county recorder's office. Here in the Phoenix area, they are online and you can search the listings yourself.

Brad said...

Awesome - thanks for the tip. Off I go...

sam said...

Hi, coming across this post, I thought maybe someone down here might have some good advice on how to sell your own house without a real estate agent. I’ve heard that according to a number of different sources, between 80% and 90% of owners who attempt to sell their homes on their own eventually enlist the aid of a realtor. Would anyone reccomend to deal with these guys sell house fast ? I’m afraid I might be in for a loss or getting much less then the market value. Thanks for your insight.

Shaun said...

Sam - you are correct. The majority of people who try to sell their home without a Realtor end up listing with one eventually. Mainly that is because their house does not get into the MLS, which is owned by Realtors. However, there are many companies now that will put your home in the MLS for a flat fee. You may have luck with one of these. Make sure you know all the details. If all you want is an MLS listing, make sure that's all the company gives you and that the flat fee is all they will get in payment. They should not expect a commission when it sells. However, if you go this route, you most likely will need to pay 3% to the buyer's agent, so it's not a totally commission-free sale. And you will need to have your own counsel to help you with the contracts, forms, and escrow or handle it yourself.

Of course, you can go it totally on your own. Put up signs, place newspaper ads, etc. The key to selling will be to make sure you have a realistic valuation of your home.

As for the "sell homes fast" people, they will buy your home quickly, but they will not pay you top dollar. They probably won't even pay you 90% of the market value. They way they make money is to buy below fair market value. So it's a toss up - if you want close to full market value, it will take some time to sell it with a Realtor or a bit longer on your own. If you don't have time and need to sell it as quick as possible, you'll need to accept less than full value.

sam said...

Thanks shaun, you hit the nail on its head. I totally agree about selling far below the market value, this exactly was my concern.

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