Real estate auction question? - Posted by Traci

Posted by Ronald * Starr(in No CA) on July 28, 2003 at 22:44:28:

Traci–(IL)-------------

Thank you for clarifying. Ask if they have a minimum bid or a reserve price. If they have a minimum bid and it is low enough to sound enticing, I’d suggest you do your due diligence.

Depending upon how many people show up, it could be a bargain price. I once went to a estate auction in North Platte, Nebraska, and the highest bid was something like $2,500. It was an older house, but I figured it was worth about $15K. They were going to wait for an hour before saying “Sold” in case somebody else came to bid. So I left. I didn’t expect anybody else to show up.

Just inspect it carefully and set a reasonable limit to your bid and see how it goes.

I would expect you to be able to find bargains there, at least in terms of properties that could be bought with good cash flow. You don’t indicate if you plan to hold or to to resell quickly.

There are a lot of different bargain-buying systems. The best book summarizing them is Jack Reed’s “How to buy Real Estate for at Least 20% Below Market Value,” found at www.johntreed.com website.

One of the techniques he discusses is probate or estate sales.

Good InvestingRon Starr*******

Real estate auction question? - Posted by Traci

Posted by Traci on July 28, 2003 at 07:27:46:

First, I would like to thank you for reading my question. I am planning to attend some RE auctions in my town. What is the risk of buying properties at an auction and what should I expect. Are the houses usually below market value and can we bid at any price? We’ve been search for houses in the past 4 months (MLS, newspaper, flyers) and have no success. Thank you for your help.

Traci

Re: Real estate auction question? - Posted by Bill H

Posted by Bill H on July 28, 2003 at 13:13:50:

Traci:

Read the following post that I copied from another board. The answere is YES…you can get into lots of trouble if you do not know what you are doing.

“”“LET ME EXPLAIN MY SITUATION, WE BOUGHT A FORECLOSED HOME BY PUBLIC AUCTION THAT HAS 2 MORTGAGES ON IT. THE SECOND MORTGAGE CO IS THE ONE THAT FORECLOSED. THE MORTGAGE AMOUNT OWED WAS 70,000. THEY WERE THE ONLY ONES THAT SHOWED AT THE AUCTION, THEY BID 30,000 AND WALKED OUT. WE WON AND ACCORDING TO THE COURT DOCUMENTS WE MUST PAY ALL MORTGAGES? THE SENIOR MORTGAGE CO DID NOT COME TO THE AUCTION AND THEIR LOAN IS FOR 140,000. IS THERE ANY LOOP HOLES TO GO THROUGH. WHY DID THE FIRST MORTGAGE CO BID SO LOW? IS THERE ANY NEGOTIATION GROUNDS FOR THE SR MORTGAGE CO. WE HAVE NO CHOICE, WE JUST HAVE TO PAY THAT MORTGAGE OFF ALSO? I LIVE IN SOUTH CAROLINA.”""

This person now has to pay an additional $140,000 for the first TD or lose their investment.

I urge you to “Investigate BEFORE you invest”… especially at the “Courthouse steps auctions”

Good Luck,

Bill H

please, more info - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 28, 2003 at 11:18:42:

Traci----------------

It is hard to give you any help when you use the generic term “auctions.” What type of auctions? Who is selling properties at what type of auction?

Also, it might help if you indicated where you live. In some parts of the country, auctions are common, in other parts of the country they are rare. People who live where you are might be inclined to answer your question if they knew you were where they are and their information might be helpful to you.

Now, what do you mean you are having no success? Do you mean you are not having success in finding properties to buy at bargain prices, or you are not having success at trying to buy properties at market value?

Are you buying for your own use or for investment?

Good InvestingRon Starr*

Re: please, more info - Posted by Traci

Posted by Traci on July 28, 2003 at 12:23:44:

Ron,
I’m sorry that I was too vague on my questions. I’m looking into buying bargain homes at an estate auction (sellers are elderly, or relatives…no foreclosure or REO).
I live in the southern IL area. I’m looking to buy properties for investment purposes. I have the financial resources, but have difficulty finding houses below market values (since there are numerous investors in the area). I’ve tried doing research on some pre-forclosures but after reading some of the earlier postings, it was recommended that I start off with something less complicated. Is it rare to find deals at a regular estate auction? I called the auctioneer company and they told me that these properties are cleared of any leins and sold “as is”.

Again thank you for your response.

Traci