Monday Market Myth: Notice of Default and Your Offer

Myth: If does not matter what contract a buyer uses if a Notice of Default is filed on a property, and the buyer is an investor.

False: Before an investor starts writing a contract on a home about to avoid foreclosure, their agent needs to make sure they do not need the Notice of Default Purchase Contract.  If all 4 items are met, then the agent needs to make sure they follow the Home Equity Sales Contracts Law:

(1) the property being sold is residential one-to-four units;

(2) the owner currently occupies the property;

(3) a Notice of Default (NOD) has been recorded against the property; and

(4) the buyer does not intend to occupy the property (i.e., buyer is an investor)

This must be done for the following reasons

  • Provide homeowners with information necessary to make informed, intelligent sales decisions;
  • Require written sales agreements;
  • Safeguard the public against deceit and financial hardship;
  • Insure fair dealing in the sale and purchase of homes in foreclosure;
  • Prohibit misleading representations;
  • Restrict unfair contractual terms;
  • Provide homeowners reasonable opportunity to rescind sales to equity purchasers; and
  • Protect homeowners’ equity.
You hear it here first at RealtorKJblog.com!

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