Foreclosure Brokers LLC

What role do you play?

We coordinate with you, the sellers, the real estate brokers, the lender(s) and the title company to get your offer approved by the seller's lender(s).  Our role is to work with the sellers through the foreclosure process, negotiate your offer with the foreclosing lender and finally provide the short sale approval(s) to the title company so your closing can go smoothly.  Sometimes you may have questions about the process and the status of your offer which we are always happy to answer and help guide all parties through the process. 

What is the process and the timeframe?

Once we are hired by the seller we begin coordinating the short sale immediately.  Typically, foreclosing lenders will not “open the file” until they receive a signed offer from a prospective buyer.  Once your offer and the seller's paperwork are presented to the bank(s), it can take between 40-75+ days for the final approval to be issued at which time you can complete your due diligence and move towards closing.  If a foreclosure sale date is approaching within this timeframe the foreclosing lender will most likely postpone the sale date and allow enough time to close, assuming you offer is strong enough. 

Can the seller pay concessions or incentives?

It depends on the strength of your offer.  Typically, the offers that we see get accepted and that have closing costs included are close to or above the asking price.  If you are really trying to get a bargain, we advise making your offer as simple as possible and not requesting any seller concessions.  Any closing costs requested that are larger than 3% require a copy of your Good Faith Estimate to be included with your offer.

How do you get paid?

We are hired by the sellers for 2% of the final purchase price.  This fee is split between both you and the seller and paid at closing.  In some cases the foreclosing lender will not allow our fee to be paid by the seller.  If this should arise, we split the seller's portion with both brokers (1/3 each) to contribute to cover the seller's share of our fee.  These fees are only earned if Foreclosure Brokers can obtain an approval letter for your offer from ALL lien holders.  The amount of our Loss Mitigation Service Fee is 2% of the contract purchase price.  (For Example if you are offering $200,000, the Loss Mitigation Service Fee will be $4,000 (2% of $200,000).  You would be responsible for ½ or $2,000.)

Will the Loss Mitigation Service Fee cause me to have to pay more for the home?

No. We recommend you simply adjust for the fact that you will need to pay a portion of our fee at closing in addition to the purchase price.  Many buyers reduce their proposed offering price by the amount of the Buyer’s share of the fee.  Make sure you talk with your lender to determine if our fee can get paid from your side of the settlement statement - some allow it, some don't.  If you aren't asking for a concession already, include 1% to off-set the fee.

What happens if the seller's lender declines to pay the seller’s part of the Loss Mitigation Service Fee or other closing costs?

Most lenders are willing to allow the seller to pay for the Foreclosure Brokers negotiation services. However, some lenders and/or their investors have a policy against these fees.  In these instances we require the real estate brokers to split the unpaid portion between both brokers and our office (we absorb 1/3% so our fee becomes 1.66% of the purchase price).

In some cases, the foreclosing lenders also refuse to pay typical seller closing costs.  These may include, but are not limited to: Release / Re-conveyance Fees, Document Preparation Fees, Courier Fees, Overnight/E-Doc/Wire Fees, Water / Sewer Escrows, Miscellaneous  Title Fees, HOA Transfer Fees and HOA past due balances.  If the foreclosing lender is refuses to pay these costs, the buyer and brokers must absorb them if they want to close.  In the end, you are still getting the home for a great price. Thus it's still a win-win.

How much should I offer?

Keeping in mind the above, you can submit any contract to Foreclosure Brokers you desire. However, know that other buyers can still make offers until one is accepted by the lender(s).  The lower the offer, the longer the acceptance time you can expect and the more potential you have to get preempted by another offer.  Foreclosure Brokers reviews all contracts and determines if they are in the realm of possibility.  Cash offers and offers with quick closing times carry more weight than those which are contingent on a loan or those delaying the closing into the distant future. 

Will the seller accept my offer?

The minimum requirements are:

• You must understand our involvement and must be okay with paying our fee as part of the transaction.

• You must be patient.  Short sales can take a long time and because of the large amount of foreclosures in the country, the lenders are extremely backed up.

• Your offer cannot be contingent on the sale of another property.

• The property must be purchased "As-Is".

• You must be able to close within 30 days of approval.

Why does the seller sign all contracts presented?

The seller’s primary goal in this process is to stop their foreclosure.  Because their lender is the one who makes the final decision and will only consider signed contracts, the seller is typically advised to sign all “in the ball park” contracts.  Because every contract submitted to the lender is contingent on foreclosing lender approval, only one contract will get approved, therefore only one contract will be in full force and effect after lender approval is obtained and all other offers are declined.

If your offer is not the best contract received, you will have the option to resubmit it with a higher price or better terms.  Or, if you prefer, it can act as a backup contract in the event the best contract does not close. [Remember: the best contract does not necessarily mean the highest price, though it typically is; but time to closing, amount down, terms, loans, contingences and the lender assessment of your strength and ability to close, all play an important role as well.] 

Short Sales tend to be a waiting game and if you can “out-wait” the other buyers your offer may get accepted although it was not initially the highest or best.  For example: If the best offer gets accepted by the lender but the buyer withdraws it because of an unrelated issue, we look at all pending offers to determine who has the next best offer and present that one to the lender for approval. 

No.  Stay away from these at all costs!   Two big reasons are: 1) The lender will not allow the seller to receive ANY benefit if they are taking a loss.  Your involvement could be construed as a assisting the seller in committing bank fraud.  2) If you set up rent payments with the old seller and they stop making those payments, you would have no choice but to evict them.  Once an 'angel' investor, you would now fall under scrutiny for trying to protect yourself.  This is the primary source of "Foreclosure Rescue Scams" you hear about in the news and the primary reason why people end up in front of a judge with foreclosures. 

Call or email us if you have more questions or if you want to check the status of your file- 303-399-7484 or Status@Foreclosure-Brokers.com.