Well, yes. "Owner financing" & "Pre-foreclosure" do seem like odd terms to be used regarding the same property. If the current owner could afford to owner-finance...then why the heck don't they just make the mortgage payments??

There's more to the story than you've ferreted out, so far.

Possibly...Possibly...

The foreclosing lender has agreed to finance the property (for a qualified buyer) should the current owner/borrower be fortunate enough to sell it prior to the foreclosure sale?

Is there a REALTOR involved?

/tricia

I found it on the MLS and it's listed with a real estate agency. It's a small one that I've never heard of, but it's an agency.

The story I've been able to piece together so far is that the house was listed in December by the owner's boyfriend. The person I'm working with now is a broker in the same firm. I think.

I called the broker and asked her if the house was in foreclosure and she said she didn't know, only that it said in the listing that the owner was trying to avoid foreclosure. The preforeclosure thing was a listing I found online that I don't think anyone involved with the sale is aware of. Would the agent know if the house was in preforeclosure if the owner didn't tell them?

I found it on the MLS and it's listed with a real estate agency. It's a small one that I've never heard of, but it's an agency.

It could be a flat fee listing only company, that takes a fee for putting the house on the MLS, but does nothing else.

The agent that listed it works there, and so does the broker I've been talking to. Do flat fee companies usually have agents and brokers? I did a search and didn't come up with anything listing them as anything other than a real estate agency, but that could mean nothing.

Another question I have after doing research on the owner financing--what is the best route to go? Deed of trust? I've read things about land contract that make me leery of it.

Can't answer your question without knowing what state we're talking about. Some states use Deeds of Trust & others use mortgages.

Land contracts should give anybody the willies, IMO.

/tricia

Do flat fee companies usually have agents and brokers?

Well, they have to have a broker. Some companies do both flat fee and full service.

We're in Nebraska. I'm not too fond of the idea of land contract, but I don't know if we can get a conventional mortgage, and I also don't know if we would have enough time to get a conventional mortgage with this particular house anyway.

It sounds a little fishy to me.

Owner financing basiclaly means the seller is acting as the bank. Instead of getting a lump sum of money from the buyer, they accept monthly payments, just like a bank. But you kind of have to have money to be able to do this. Once the seller sells to you, where will they live? They won't have a house or a lump sum of sale proceeds, and if they're in pre-foreclosure they probably don't have a lot of buffer savings.

If it were me, I'd start working on getting a regular mortgage. If it takes too long for you to be able to buy this exact house, well, stuff happens. There's always another house.

Housenewbie, that's what I always try to remind myself. I tend to fall in love with old houses that I can save, and this one fits perfectly--neglected 100 year old house converted into a duplex. But, yes, it does sound fishy, and DH and I are thinking we're going to pass. I just feel like maybe the foreclosure proceedings are already started and are probably too far gone for us to be able to buy this house. Plus I don't really trust that the seller would continue to pay the mortgage if we did owner financing. I don't think that the seller (or maybe it's the seller's boyfriend) is being honest with the broker about the house's foreclosure status.

Right now we're looking at rental houses. That way we could get all the things we wanted from buying a house (yard for the kids, more space, place for our dog) without having to make any rash decisions.

One red flag for me is if you pay the owner, and they keep the money, but don't pay the mortgage company, you loose the money and the house. Personally, without a lawyer I would pass. I would not give the owner anything.

Keep your eyes peeled as you live in your rental, you may just see this property pop up at a sheriff's sale and have a crack at it down the road.

Me again. Is the boyfriend on the deed? If not why is he involved. Also you mentioned that this house is a duplex. Were permits obtained? You need either a good inspector, or check with the building dept. Were walls removed that could damage the structure of the house? Wiring--asbestos? lead paint? basement? water? septic ? wells? Too many questions, too few answers
At least check some of these out for the future.

Mariend, that was a red flag for me, too. I liked the idea of trust deed, where there was a third party involved, but it still seems like the possibility for the owner pocketing the money is there.

I don't know if the boyfriend is on the deed or not. My understanding is that he was the real estate agent she used to list the house. I have no idea if the duplex was permitted, but I think the bare minimum was done. To me--I never got inside so I could be wrong--it looked like they had put a wall up next to the staircase to make it an up-down duplex and put in two front doors. It probably wouldn't be too hard to undo.

Have you been to the land records to read whatever type of document is currently securitizing the loan? Normally, there's a "Due On Sale" clause that would make the existing loan callable at any time the lender so chose. That would put you in a difficult position. I'd take a pass on this one...

/tricia

Don't do it! If the owner doesn't continue HIS obligation with his mortgage company you will be out with nothing. I assume you are saying the current owner will finance the house for you (you will make payments to him, and he will keep up his obligation to the mortgage company?) If I wanted the house it would be with a new loan between me and the bank.

I had a friend who had this happen to them.