can i purchase a commercial property while it is in forfeiture process, and not yet auctioned?

In Buying Property - Asked by Al B. - Apr 4, 2013
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Answer(s)

Chris R.
Broker/Agent
Denton, TX

Theoretically yes. Will take some effort and cooperation of all parties. Buyer will have to be in contact and agreement with seller and sellers lenders to pull it off. Lots of hurdles here. Will likely need a goodattorney to help get this done.

Apr 8, 2013
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Margot F.
Broker/Agent
Valrico, FL

Actually easier than you would think. It requires a Broker and some time. You don't need an attorney and the bank is more giving than when property gets listed.

Apr 9, 2013
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Amber B.
Broker/Agent
Portage, MI

This is a state specific question and this type of deal should not be approached without an attorney experienced in real estate law. Many states have redemption periods whereby the defaulting owner has a period of time to get the property back and continues to have legal ownership of the property, even after auction. The purchaser of the property has equitable title until the redemption period is up. The rules are not the same for commercial and residential properties but care should be taken in both situations.

Apr 15, 2013
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Michael C.
Broker/Agent
San Leandro, CA

Hi, When you say "forfeiture" do you mean the loan is in default? If so, how long has it been in default? THe closer to the sale date, the less likely it will work. What role are you playing? If it is strictly as a buyer. Have you contacted the owner to find out if the property is listed? If not are they willing to sell the property to you? If they are, have they been in communication with their lender(s) recently about the loan situation? If so, is/are the loan balance(s) higher than the value of the property?
If so, are they willing to take less than they are owed? Who owns the loan(s)? Is it a government entity, private party or commercial bank? Are you working with a (RE) broker? If all of the above questions are answered, and everything is favorable, Than the answer maybe YES.
Keep in mind that the owner is still the owner and the lender is still the lender even though the lender(s) has to approve the loan discount. So....It might go something like this: you make an offer to the seller, the seller accepts the offer and then submits is to their lender(s), their lender decides to allow the seller to seller and take less they are owed and the property can be sold before the auction. In California an attorney is not required to handle this type of transaction. The seller should consider consulting with an attorney and CPA to advise them about the legal and financial consequences. The above is a simplified version of what can happen. There are many other factors that were not discussed above. This type of transaction will have a higher level of success with the right team in place.

Apr 17, 2013
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Robert H.
Broker/Agent
Hattiesburg, MS

research the bank who has the note by using court records and go talk to the bank.

Apr 20, 2013
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Michael C.
Broker/Agent
San Leandro, CA

HERE Is the 2nd part following my april 17 response..
If the forfeiture is from a government agency for taxes owed, us marshall, etc. generally they will not allow a purchase unless the buyer/entity fits in to certain criteria. They are obligated to generate as much money as possible, so they have to expose it to the market. However if the minimum bid is too high,on occasion, an asset will not bring in any bid. In that case, they may allow you to purchase it after the auction,. You can check their website for more details or upcoming auctions. usmarshals.gov, click the fact sheet tab, then click asset forfeiture to see the exceptions there. treasury.gov for IRS auctions...

Apr 25, 2013
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