Foreclosure and First Right of Refusal

[dancerat]

What is the name of your state? Washington.

I hold the first right of refusal on a parcel of land next to my home I am purchasing. The owner has not been paying her payments and the beneficiary of the deed has decided to foreclose. He has offered me a small sum to relinquish my interest in the property, but I refused and tried to negotiate out a deal through our attorneys. He refuses to negotiate and I suspect he wants the land to sell for a much higher price than is currently owed on it. I am working with an attorney, but he is out of town for the holidays - has anyone ever heard of paying off the loan after it goes into foreclosure but before the trustee sale and forcing the foreclosure to stop and then becoming the senior lienholder? I think I might be able to do that since I have an interest/encumbrance in the property, even though it is not a monied one. Just wondered if I paid all the amounts owing claimed in the foreclosure suit if I can force the beneficiary to relinquish senior lienholdership to me. Thanks!

 

[MortgageGuru]

If the present owner or bank want to sell the property for fair market value then they can and will. Your right of refusal is limited to saying either yes or no to buying it. It doesn't give you more bargaining power over the purchase price than any other buyer would have.

 

[dancerat]

first right of refusal

My first right of refusal also has a price attached to it - it basically states that I have the first right of refusal to purchase the property for the sum of 12,500. There is no time limit to it. But that wasn't my question, because it is my understanding that once the foreclosure goes through and there is a trustee sale that my interest is wiped out - so my question is if anyone has ever heard of paying off the full debt plus court costs pretrustee sale since I have an encumbrance on the property and subrogating the senior lien and I think I have a right to do that and stop the sale. I will let everyone know what my attorney finds out.

 

[MortgageGuru]

What kind of encumbrance is it? Be specific.

 

[dancerat]

Encumbrance

Washington State - It is a right of first refusal. Basically stated, it says that I as grantee has first right of refusal to purchase the land for a specified amount of money. There is no time limit specified. That is the encumbrance.

 

[MortgageGuru]

Just keep it simple and have the property owner sell it to you for the payoff.

 

[dancerat]

Back again.

Is a right of first refusal considered an encumbrance on the land in Washington? It must be or else they wouldn't try to remove it off the title before foreclosure. I would love to keep it simple and pay them the money for the land. They refuse. I am even offering to pay them full price for the land plus their attorney's fees. They refuse. So I am forced to go a different way. My attorney has not come across something like this before, so we are kind of winging it for now, which is why I am also asking for some sort of light on this board; maybe someone somewhere has come across this before.