Question: We purchased an extremely run down (non livable) house last November on land contract. We had the land contract drawn up by a real estate lawyer, added our name to register of deeds, etc.
After 9 mos of my husband and I renovating the home to livable conditions, we moved in 3 months ago. We invested over $25,000 into this home during the 9 mos renovation period.
This week we came home and found a bank foreclosure letter on the door in the name of the person we purchased from with an auction date in less than 1 month.
Do we, as the land contract owners, have any higher priority in purchasing this home when it goes up for auction? Does anyone know if there is anything that can be done?
Answer:
Hi: Sorry to hear of your troubles. First and foremost, no, you don’t have any more priority at the auction then the next guy… in fact the auction can be like the mob if you’re careful. It’s not place to mess around if you’ve never done it before. What you can do if you have not filed a lien on the property at the county, you might consider that. It will cloud the title and hopefully stall anyone from getting clear title placing a bid in front of you(You will want to document the repairs as well with photos- before and after- and receipts for repairs/renovations).
Get in touch if you haven’t with the lender and make a direct cash purchase OR do a refi NOT a purchase. If there are seasoning issues with the current land contract -ask for an exception based on the current craziness. With equity in the property and decent credit the lender would be crazy to let this property to go to sheriff sale in the current market especially if your land contract is for a purchase price higher than the old payoff of current mortgage now in foreclosure- that could be your leverage. Consult a real estate attorney for specifics on law. If you need a possible hard money lender to help you close the deal, feel free to contact me.(There might be a short sale opportunity here as well- but that might be throwing more mud on the wall)….