Protocol for buying at foreclosure auction

DEAR BOB: A house is about to go to foreclosure auctionsale. I am interested in buying it. Can I make a cash offer directly to theforeclosing lender before the property is offered at the public auction?–Cathy T.

DEAR CATHY: Negotiating with the foreclosing lender beforethe foreclosure auction is usually a waste of time. Until the auction takesplace, the lender has no authority to sell the property to you or anyone elseexcept at the required public auction sale.

Purchase Bob Bruss reports online.

If no bidders show up at the foreclosure auction, then thelender owns the property (subject to any redemption right of the defaultingborrower) and can make a deal with you. That’s the time to contact the lender,immediately after the public auction.

PROBATE SALES ARE USUALLY “AS IS”

DEAR BOB: Last October we bought our home. Before wepurchased, we got a professional inspection. Our inspector said the furnace wasdangerous. But the local gas company representative inspected the furnace andsaid it was in good condition. After we moved in, when the gas company came outto turn on the gas, the man said the furnace was bad. I phoned the real estateagent. He said to call our home warranty company. As soon as their techniciansaw the furnace, he said it was cracked inside and unsafe to operate. Thewarranty company says this was a “pre-existing condition,” which isnot covered by our one-year warranty. The seller refuses to pay for a newfurnace because the gas company said the furnace was fine. Because it was aprobate sale, and we signed release forms, the sellers refuse to pay anything.Are we stuck buying a new furnace ourselves? –Benjamin G.

DEAR BENJAMIN: The general rule when you buy a probateproperty is you purchase “as is.” That means the seller is notobligated to pay for any repairs.

Because the seller, presumably the estate executor oradministrator, was not familiar with the house, it can’t be said he or she knewof the defective furnace.

Also, the fact you signed a release form is not good foryou. I suggest you consider this a “learning experience” and pay forthe new furnace.

WITH FOUR CO-OWNERS, HOUSE SALE WON’T BE EASY

DEAR BOB: My three brothers and I own the house where wegrew up. The longtime tenant recently moved to an assisted-living center. Iwant to sell the house, as does one of my brothers. The other two brothersthink we should keep the house because the neighborhood is slowly improving. Ihave two teenagers who will soon be going to college and we can use the extramoney from selling the house. How can I convince my two “wayward”brothers to sell? –Alicia H.

DEAR ALICIA: Unless all four co-owners agree in advance tosell the house, a sale won’t be easy. However, you and the brother who want tosell can force a sale by bringing a “partition lawsuit” in court.

The judge will be asked in that lawsuit to order the housesold with the sales proceeds divided among the four co-owners.

However, the partition lawsuit will probably cause hostilitywithin the family. Before you seek legal action, ask the two brothers who wantto keep the house to buy you and your brother out.

To determine the current market value of the house, aprofessional appraiser should be hired. That appraisal can become valuable ifyou decide to bring a partition lawsuit. For further details, please consult alocal real estate attorney.

The new Robert Bruss special report, “When It’s Smartto Prepay or Refinance Your Mortgage,” is now available for $5 from RobertBruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736or instant Internet delivery at www.BobBruss.com.Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2007 Inman News

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