How do I go about trying to purchase a property that is only days away from auction? There is a first and second. I am willing to pay full amount of the 1st. Do I contact the lender or trustee? Over the phone, or in writing? Do I need to use a Realtor?
The only party that has the legal right to sell the property prior to the trustee sale is the homeowner. You would need to enter into a contract with the homeowner. The lender does not have the legal authority to sell the property until after the foreclosure.
Michelle is exactly right. You need to contact the home owner. You said that you are “willing to pay the full amount on the 1st.” But the scenario you’re describing would be to buy the property *before* the trustee sale and hence buying the 1st in this case would *not* wipe out the 2nd to you. So if the math does not work out you might want to pass.
I was recently tracking a property that was coming to foreclosure only to see just a few days before the trustee sale that a grant deed was recorded showing an LLC as the new owner. The LLC name rang a bell. I did a bit more recorder’s office and Google sleuthing only to find that a regular steps buyer (my competition) had negotiated with both the owner and the 1st DOT lender on a “pocket short sale.” The deeply underwater owner got a small payment from the investor (for agreeing to sell) and the lender agreed to accept $250K less than the full debt owed on their DOT. There was only 1 loan to deal with + some back due HOA fees which were also negotiated down by the investor. The transaction was all sowed up 2 days before the scheduled trustee sale date. The investor has a ready buyer for a quick resale and the lender agreed in writing to forego any deficiency claim vs the underwater (now “ex”) owner. Pretty neat trick and hats off to the investment team who managed to successfully coordinate/negotiate with all parties (owner, lender, HOA, new “soon to be” owner).
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