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.