Short Sale, Foreclosure and Strategic Default


Tuesday, May 26, 2009

Pre-foreclosure investor buyouts

What is a pre-foreclosure investor buyout?
Investors purport to be able to negotiate wholesale deals with your lenders.
They convince your Realtor to let them do all the work and let the Realtor make 6% on the flip when the buyer takes over the property.
They claim it is a great deal for everyone because they are skilled negotiators.

The reality for San Diego Real Estate homeowners is quite different.

Lenders know that the market in San Diego is quite strong.
Recently and asset manager told me they are netting 100-102 percent of appraised value for Foreclosures and 92-96% for short sales.
He was asked about stories of investors buying properties "wholesale" he said not around here. The banks keeps stats, why would they take a big discount from appraised value when they do not have to?

Additionally - why should investors lock in more potential tax liability or deficiency liability.

Before you list your property with a Realtor who says he works with investors. Get all the facts and create a workout plan. Right now the buyer are out looking. Selling to an investor could be at best a big waste of time and at worst a large financial mistake.

If your property is for sale in a market which is still slow, there may be a reason to work with an investor. But before you take a deal from and investor, speak with a lawyer.

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