Foreclosure auctions...

[investinAK]

Hey everyone, I was just curious if anyone here knows "standard" protocol at a foreclosure auction? What happens? What do you have to do? Do you have to have the purchase price in your pocket to bid? Is bidding essentially like making offers and counters until it is settled? Does the property go into escrow like any other property? As you can see I am VERY in the dark and would appreciate EVERYBODY's input and advice. Thanks

Ryan

[investinAK]

Anybody.......?? :SM030:

[Aldo]

I don't do auctions, so I can't tell you much. I do know that procedures will often vary from one jurisdiction to another. Locally this is done by sealed bids and buyers must have a cashier's check with them for 10% of the offered price.

[REIaddicted]

Anybody.......?? :SM030:
Ryan,
Have you downloaded this free forclosure e-book?

Foreclosure investing mini ebook
You can download my free 30-page foreclosure investing mini ebook at: http://trice84.tripod.com/gifts/My_gift_to_you.pdf

Also I have e-mailed JM so he can add light to this subject. Let us know what you think of the free download

[REIaddicted]

http://www.co.clark.wa.us/treasurer/property/RealProp_AuctionInfo.html

http://www.ehow.com/how_2742_bid-auction.html

http://www.ehow.com/how_5835_buy-home-auction.html

[investinAK]

Thanks Lisa, I will check those sites out! :)

[investinAK]

My main question was whether or not it is possible to make an offer on the properties before they go to auction? Say there is a property that is worth $100,000 and they owe $60,000 and are in foreclosure...would it be possible to make an offer for what they owe, turn around and sell it on the market before the sale? I hope this question makes sense! :)

[Dan Auito]

Very possible indeed Ryan, :smiley5: Randy at www.purpose.4t.com has an excellent course on how to effect the "short sale" I highly recommend it!

[investinAK]

Does anyone know if they start the auctions at what is owed on the properties? I found a house on on a foreclosure website, and the tax assessment is about $133k, and the auction starts at $51k...doesnt take too much in the form of knowledge to say that is a fair spread...(38%FMV) not sure of the repairs needed--if any...I appreciate everyones input as always! :)

[REIaddicted]

My main question was whether or not it is possible to make an offer on the properties before they go to auction? Say there is a property that is worth $100,000 and they owe $60,000 and are in foreclosure...would it be possible to make an offer for what they owe, turn around and sell it on the market before the sale? I hope this question makes sense! :)

The answer is yes. As Dan pointed out, it is a short sale. There are some quick articles on the article site on short sale. However, you should take a course in it as it isn't as easy as it sounds. The packet to submit can be very time consuming if you are going to expect to have the offer accepted.

Lisa ( there are also some great post on here about short sale)

[REIaddicted]

Does anyone know if they start the auctions at what is owed on the properties? I found a house on on a foreclosure website, and the tax assessment is about $133k, and the auction starts at $51k...doesnt take too much in the form of knowledge to say that is a fair spread...(38%FMV) not sure of the repairs needed--if any...I appreciate everyones input as always! :)

Is this a sheriffs sale? If so, they generaly start out 1/2 to 1/3 of what is owed. However, the lender already has a bid in to cover what is owed.
Go on-line of the county the property is located and check out the title chain ( as much as you can)
If you have a friend in the area, have them go do the court house research and take a drive by.

Again, you need to know what the chain is on who is forclosing.

Lisa

[dealmaker]

Much depends on the "type" of state you live in. Not sure about where you are but Texas is a "trust deed" state so the TRUSTEE is selling the property, for the beneficiary (lender), for whatever it will bring. If it doesn't bring at least the amount of the indebtednes he just "sells" it to the beneficiary for the amount of the outstanding balance.

This is an ABSOLUTE sale, there is no "right of redemption" for the borrower. If you want to buy it at the auction and it's anything close to a screaming deal you had better;

(1) pre-arrange with the lender and trustee on the outstanding balance,

(2) make sure you have some way of recognizing the trustee when you get to the sale site (particularly in Houston-Harris County, Dallas or Fort Worth. In the small counties there might only be 2 or 3 per month so the trustee is probably a pretty obvious guy,

(3) have cashiers checks in hand in-varying denominations-up to the maximum amount you are willing to pay,

(4) you possibly could make arrangements with the beneficiary to finance you but it's something that you'll have to set up in advance.

Up until the day of the sale, (technically the moment of sale) the BORROWER has the right to sell the property, although obviously he can't authorize any short sale on behalf of the lender.

Hope this helps.

dealmaker

I thought I was wrong once, but I was mistaken

[Dan Auito]

I would say it certainly does Dealmaker, thank you so much for lending those words of wisdom! :praise: