Buying A Property During Redemption Period
Hi all,
I have had this question in my head for a while now and was wondering if anyone can answer it. Here in NJ, the redemption period after auction is 10 days. What if an investor such as myself, find properties that have been 'sold' to the highest bidder at the auction and approach the 'owner' and offer him a deal just like i would if it was a straight pre-foreclosure? Going to auctions in NJ is a waste of time and I thought this might work...Any thoughts if anyone does this? Thanks in advance!
You can certainly approach the homeowner (not the person who just bought it at auction) and buy the property from them. You will need to pay the full payoff, plus a couple of dollars to the sellers. You'll likely be unable to short the property so you should seek those whose judgment amounts are low enough to make a profit.
A question I have been asked and do not know how to answer is what the credit report would show at this point.
What would the payoff be at this point? The original judgement amount plus some cash for their equity or would this be the amount that the highest bidder bought the house for??? I am assuming the former is correct since logically the highest bidder's price is of no legality until the 10 days are due. How would one proceed to do this taking into account that the auction had alread transpired? Do you talk to the owner and the bank/courts??? thanks.
I would approach owner offer some $ for quit claim Deed. Then you could excercise the redemption as an owner. The redemption would be the high bid amount. Anything above the judgement amount will begiven back to recorded owner. (which would be you if you got the deed)
Let me try to understand this correctly:
If the 'original' judgement amount was 200K and an investor at an auction paid 300K for the house, I would have to cough up 300K during the redemption period after gettting the quit claim deed from the original owner. After this, I would get back the 100K difference? Sounds simple enough to me. I wonder why more investors don't do this (as far as I can tell from reading the boards) considering the possibilities of offering the original owner some cash for his troubles (after they realized that they have lost the house; some still live in denial up until the auction occurs). If I am missing something, please do let me know. For example, can the auctioninvestor come after me in any way to try to claim the house? Thanks!
Your thinking is something i have been focusing on for some time - seems many people will bid-up the properties with equity, thereby saving me a lot of time trying to figure out which properties to keep on my radar.
When i see an investor "win" a property at the sherriff sale, then I try to look into the property to see if there is a way I can get it - i know it's kind of lazy, but i sure saves a lot of driving around.