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Finding the Silver Lining in Foreclosures
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"Most people, when looking for a foreclosure, think 'no' -- they don't think 'know,' " Roberts said. "To buy a foreclosure successfully, you have to build a Rolodex, get on the Web, talk to brokers and go do your research."
Roberts said the Internet has been a boon for foreclosure investors.
"Go to the county's Web site, and see what kind of information they have listed. Sign up for the local legal newspaper. It costs about $1 per week," he said, adding that he subscribes to a number of foreclosure Web sites, some of which charge for membership. "You get what you pay for."
What I like best about Roberts and his books is that he appears to care a lot about consumers. He cautions foreclosure investors to think about homeowners and their redemption rights. He warns against being dishonest. (Foreclosure-rescue fraud schemes have grown exponentially, according to the latest figures from the Federal Trade Commission and the FBI.)
He has put a lot of time and money into fighting mortgage fraud (see his Web site, http:/
There's more information on another of his Web sites, http:/
Q: My wife and I have perfect credit and have stayed in our small, affordable home for five years. We chose not to trade up because we believed the real estate bubble would burst, and we hoped we could buy a more valuable home on the cheap.
Today we looked at a beautiful house that is worth less than the mortgage amount. The problem is that the whole house will need new carpeting because the owners' dog was not well trained. Further, the owners are chain smokers.
How do I determine how much lower than the asking price I should offer? And, more important, why is the owner involved in the negotiating if the lender is the one that would really lose out?
A: Until the lender forecloses on a property, the ownership doesn't change. That's why you're negotiating with the homeowner and not the lender. If the lender foreclosed, you would be negotiating with the lender's real estate agent or the lender's representative -- which might not be any easier.
Focus on what the property is really worth. Take a look at similar homes (in a similar condition) that have recently sold. How much did they sell for? If they were in better condition, you can subtract the price of replacing the carpet, painting the walls and doing whatever else you need to do to get the house in perfect condition.
It's possible that the home's list price reflects the lower prices of homes sold in the neighborhood. If that's the case, yucky carpet and smoky walls or not, if the price of the property is on par with what is selling, you may not be able to get any more cash off the top to cover these necessary improvements.
