Posted by Dan (MO) on January 08, 2001 at 07:37:49:
“You have to have cash the day of the sale”?
You mean you cant just give them a earnest deposit and then have 10 days or whatever to get the financing? Would an earnest deposit coupled with a letter of approval from a lender suffice? Or do you just have to have the ability to pay the trustee handling the sale right then and there via either writing a check or forking over some green.
Thanks in advance,
Dan (MO)
Buying foreclosures at auction - Posted by Portland, OR
Posted by Portland, OR on January 07, 2001 at 13:43:04:
Okay, I have that $150-$250K cash/credit lines I can use to pay cash for properties. Has anyone in this group ever purchased a property at a foreclosure auction? What was the competition like? Did the bank try to outbid you beyond what was owed on it, or did they stop bidding once they had their loans and costs covered?
Marc
Re: Buying foreclosures at auction - Posted by Frank Chin
Posted by Frank Chin on January 08, 2001 at 13:56:40:
Besides the courthouse steps, I’ve attended foreclosure auctions organized by Auction companies (Sheldon Good etc.):
At the site of the property. The autioneer holds the auction at the house, coop or condo.
At a public hall. Usually a bank or banks tries to unload a number of properties. In the early 90’s they provide financing with as little as 10% down at these auctions.
Regarding these auctions:
a) Make sure its an absolute auction where the lowest bidder is the buyer. Under reserve means the seller can reject the bid.
b) Bidding by Pool. This means the highest bidder for each round gets to choose the property from all of the ones available. Then the next round starts and the process is repeated.
c) Absolute applies to some many properties. In some pool auctions, absolute bids are allowed for the first dozen or so bids.
As an interesting aside, I attended an auction at a property where I was the only bidder. Unfortunately it was not absolute and the bid was rejected.
A funnier story I heard was at a buidling where I own a condo. The story is that a twin brother owned the condo where his brother is the roommate. Property values plummetted and he stopped paying the $80,000 mortgage. Short notice was given in the local papers and an absolute auction held in the condo. The twin brother of the owner was the only one who showed up, just to see what was going on. When he realized what has happend, he put in a bid for 16,000 which was accepted. The condo board was furious, but somehow was not able to exercise their right of first refusal.
Re: Buying foreclosures at auction - Posted by Bill Taylor
Posted by Bill Taylor on January 07, 2001 at 18:52:55:
Marc we bought several properties this yr in the foreclosure sale at the courthouse. It is a good idea to have someone check out for tax liens that may be on the property. I found very little competition at the courthouse due to the fact you have to have cash the day of sale.Rarely does the bank bid more than their origianl bid. They of course will be your primary competition, not that they want the property but they do insist on protecting their interest. Someitmes the finanacial institution will not bid up to their loan. This may be the case if the property is in extremely poor condition. I bought a property in a November auction for 35000 and sold it in thirty days for 64900 on a L/O. I could have sold it for cash ut chose not to to reduce my tax liability. It is a fun way to buy property if you have the cash available. Good luck!