Re: Ohio foreclosure auction questions? - Posted by JT-IN
Posted by JT-IN on October 14, 2003 at 08:06:40:
Dell:
What county are you located, in Ohio…?
Before you get all frothed up over these minimum bids being accepted, it would be good to understand a few things first… Just because a property goes for minimum bid, if the min bid was made by the Lender, that doesn’t mean that this was their top bid. e.g. Opening bid of 66K from the Plaintiff, no other bids, sold to the Plaintiff for 66K. The same case, lets say you also bid 66.1K, then the Plaintiff bid 70K… then you bid 70.1K, then the P bid 80K… and so on. No telling where they would have stopped, had there been another bidder… Now if the min bid si being made by someone other than the Plaintiff, then that is a different story; but doubtful, based on the one-bid description…
Do I rely on the appraisal…? Not too much… Most of the times they are not reflecting the current condition of the property, just seeking comps that have sold, and assuming that the house is in “A” condition… This is not reality in most cases, as when folks aren’t paying the mtg for the past several years, they are also not likely to being performing proper maintenance either… although I have seen exceptions to this rule… I have a pretty strong sense of RE values in my area, so I can usually come close with a comp right out of my backside… then I check public record to substantiate the backside approach.
IRS redemption…? Quite unlikely, but it can and does happen… I would say it happens in less than 1% of the cases. If they do redeem, they will pay you what you paid for the property, plus 6% interest. They will pay no other fees or fix up costs, except that there are exception to that rule, but only with a fight… That info is NOT from first-hand knowldge, thankfully…
Property tax liens are much more likely to be redeemed… depending upon what the property is; house vs. land… Does your county sell tax lien certs…? Many counties in Ohio sell Tax Deeds, which follow the same confirmation process as mtg foreclosures. The owner only has until confirmation of sale, usually 30 to 60 days, to redeem the property. This rarely happens on tax deed sales, due to the fact that if they could redeem, they would have paid for it prior to it going to sale in the first place. Therein lies another opportunity, once you become more proficient at foreclosures… Whenever there is a particularly good property that you didn’t buy at tax deed or mtg foreclosure sale, you can be the catalytic force in redeeming for a property owner… Of course you will only do this if you can clear all other matters on the title, in addition to having a Deed signed by the seller first… Just another wrinkle…
“Then we started thinking, Ok there is a thirty day redemption period. We could have the clean up one and be ready to go to market in 30 days.”
Whoops… you have gotten the cart before the horse here… This is the biggest problem with buying at Sheriff Sale… During the 30 day redemption period, the owner may still be occupying the property. Even if they are not, you legally have NO rights to occupy, repair, market, or step-foot on the property… (Of course I won’t say to you that I have never done this myself a few times). You don’t acquire any rights until after confirmation of sale… They if they are occupying, following confirmation of sale, you then file a “Writ of Possession” with the Clerk of Courts… This will cause the Sheriff to visit them at the property, post a notice to vacate, of whcih they then have 30 days to do so… The ntire confirmation and occupancy process can easily take 90 days. During that process, you are legally allowed to drive by and admire your equity… My average turn around on these properties are about 170 days… from Sheriff Sale to closing with a Buyer… Shortest time has been 59 days, and the longest, 10 months…
You need to completely understand the risks of buying at Sheriff Sale… such as liens, etc… but the biggest risk is lack of control for some time while the entire process is playing out. Some of these Atty firms are completely incompetent to do their job, which costs you money in the long run…
Just the way that I view things…
JT-IN