This week we finished another project in Kaneohe, Hawaii where we rescued a homeowner from foreclosure. This single family home acquisition was particularly rewarding because we built such a strong rapport and friendship with the seller. It was a true joy from the first meeting last spring through a few days ago when we confirmed that the seller got a big check and was able to put the entire mortgage mess behind her and start a new chapter going forward.
We structured this home acquisition a bit differently than our prior purchases. We bought the house in March on an Agreement of Sale and reinstated the delinquent mortgage (paid the arrears), stopping the foreclosure action immediately. What a relief for the owner! Then we continued to make ALL MORTGAGE PAYMENTS on her behalf to keep the mortgage current. Of course, we renovated the house and paid all the monthly utilities and taxes as well – she didn’t have to pay another dime AND the foreclosure action was halted.
We then had a trusted broker list the property on the local Honolulu MLS and closed this week with a new buyer. 🙂
Let’s briefly look two big advantages of the Agreement of Sale scenario that we implemented…
1) Because less capital is required on our part in this scenario (than a traditional full cash purchase), we can PAY MORE for your property. For this particular house in Kaneohe, the seller even earned some extra interest on her money!
2) Unlike a traditional direct sale of your house where your mortgage is paid off at closing, in an Agreement of Sale we continue to make your mortgage payments for you while we renovate the property. Why is this an advantage?
Because quite often people in these situations are behind in their mortgage payments — by reinstating the mortgage and making your payments for you, your credit can be helped because each mortgage payment we make is still in your name! Essentially, we start building your credit back up.
3) Your mortgage is still paid off in full when we close with the new buyer. By delaying the payout during the period of the Agreement of Sale (usually 6 months or less), you earn more money and help your credit.
Again, the seller was so happy with how we helped her and her family move forward. Of course, our renovation and other costs were funded by a private mortgage lender who earned a collateralized, great interest rate on her funds (that’s how we fund all of our deals).
Right now we’re in the middle of renovating another single family home in Kaneohe with an amazing ocean view (seriously, this has almost an 180-degree view of Kaneohe Bay).
If you have a home for sale and are looking at different ways to sell your house, then ask us if an Agreement of Sale may be right for you. Of course, a traditional full cash purchase is always an option as well.