Hello,

This is the second try at this message. I did not see my first one posted. I recently looked at a FSBO home, but decided not to make an offer, because it was too small. Today I received an email that it was in preforeclosure. I would like to make an offer, because if I get it cheaper, I can afford to add on. The owner has $50,000 in equity. My question is: is it possible to contact the lender and negotiate the loan amount down at all? How do approach the bank? Then I could offer the owner more of his equity and still get a deal? Is this done at all? If not, in your experience, if an owner has a lot of equity, how far will they drop the price? One last question: If we contact the owner with a low-end bid, should we tell him that we know about the foreclosure?

Thanks in advance.

If as you indicated the property is in Pre-foreclosure the bank Can Not talk to you with out a signed release of loan information by the borrower / seller.

With that much equity, you need to be talking to the seller NOT the bank. With that much Equity... assuming the house is not a $1,000,000 property.. the bank has no real worries about recouping their funds and has no real motivation to work with you.

HOWEVER, the Seller / Borrower will be motivated... he will lose most (usually All) of the equity if foreclosed, along with his credit rating.

Depending on how knowledgeable you are... you could consider offering the Seller / Borrower $5,000 to $7,500 for the deed and take the house Sub 2. If you didn't fully understand what I just said, then DO NOT try it... it takes knowledge beyond what most residential real estate agents have and may not comply with their Brokerage purchase requirements.

You may talk to the bank ONLY when the property is REO, unless you have the borrowers signed authorization.