Upcoming Foreclosures

Option to Purchase on Foreclosure?

Can an real estate investor put an option down on properties that are: 1.) In pre-foreclosure 2.) REO... Bank Owned 3.) Or properties listed with a Real Estate Agent I am doing research on the Option to Purchase(Not Lease Option), and just wanted to see what other investors had to say. Thanks

Public Comments

1. You can put an offer in on anything you want. The question is. Will they accept your offer? The control remains in their hands. You can only influence their actions, by representing a good enough offer that they can't refuse. I think you know that there are many variables. The more desperate they are, the more likely they are to accept or possibly reject (out of emotion) what otherwise would be a crummy offer.
2. I'm a real estate investor (as well as a Realtor). To address your three situations: Pre-Foreclosure. ANSWER: Yes. However, unless you're going to wholesale the option or exercise it quickly, don't do it. The foreclosure will wipe out your interest. A much safer way to proceed is to do a "Subject To" on the property. That way, you actually own it, rather than simply having an option on it. REO ANSWER: No. I'm not aware of any banks that'll option REOs. Once they have the property and are trying to sell it, they're only interested in selling it. Listed Properties ANSWER: Yes. Most real estate agents don't like options, if they understand them at all. Nevertheless, the transaction is between you and the owner. If you persuade the owner that an option is in his interest, he can certainly accept an option on the property. And, while I'm not a lawyer so this isn't legal advice, keep in mind that a standard contract with contingencies is very similar to an option. If you submit a contract saying: "I'll buy your house IF I can get acceptable financing and IF the home inspector says the house is in good condition," that's really the same as having an option on the house. Except, with that type of offer, you even get your option money (your deposit) back if you decide not to proceed. Hope that helps.