Anyone bought a house at a foreclosure auction

There is a house I want to get in Palm Springs. It goes to auction in January in Corona California. Anyone have any experience with this. Thoughts. Thanks,

I buy about 15-20 a month for investors of mine here in SW Florida, and its actually a pretty easy process as long as you do your homework. Keep in mind, this is how things work here, but I doubt it varys much anywhere else. Your going to want to go out and check out the house beforehand, which it sounds like you might have already done since you know the house. If there is anyone living in it currently, you may want to work out a resolve to get them out. Technically, they are supposed to be gone already when the auction comes, but thats not always the case. If they arnt out of the house, then you have to evict them and people who are losing their homes tend to take it out on the house some of the time. Your going to have to to have a deposit ready the day of the auction. Here its 5% or more of the purchase price either by cashiers check or cold hard cash. The rest of the balance is due by 4 pm that day again by cashiers check or cash. Before the auction starts several different representatives for various attorneys offices will read off the cases (homes) they represent and what the bank is willing to take as a minimum for the property. Pretty much this just states that they will continue to bid to this point on behalf of the plaintiff and if your not willing to start the bidding above that, dont bother. Pretty cut and dry, just make sure you do your homework ahead of time. Also, make sure you talk to a good reputable title agency in the area and make sure that they check for any difficiencies in the title and also that the attorneys who are handling the foreclosure have done everything properly and nothing will pop up on you. Typically, what I purchase is anywhere between 25-50% off the retail value of the house so there are deals to be had. Be prepared to pay a decent amount for the house though. Most auctions have a core group of people who go down there and dont like others to come into their territory so will bid you up just to discourage you from coming back. Let me know if this helps.

great info! i wanted to ask this same question about the process and pitfalls.

Thanks for the info, great. The house is currently empty, I have been through it many times, perfect condition except for dead grass. The only problem I see is getting the cash by end of day. That is hard considering the property is about 800K opening bid. I have found out the time of the auction and the location but I can find anything else about the specifics of how the auction runs, deposit, timeline etc. It is not being held at the court house but instead at a civic center. I have called the reconveyance company and the publisher of the ad but they have no info. I have spent hours searching the internet but cant find anything. I am thinking I will just have to show up on a different day and see what happens.

 

 

I read that once it sells at auction that the leins are all cleared... any truth to that. I know he owes 800K on it and has a second mortgage of another 100k. He probably hasn't paid any taxes in awhile. How do I find out if the title will be clean once I bid. Thanks for your help.

I work for an Asset Management company that deals with all phases from buying the non-performing notes to reo's. The people who I deal with are the ones supplying to the clearing houses. If you have any questions feel free to PM me since I am close to you. (Glendora)

I read that once it sells at auction that the leins are all cleared... any truth to that. I know he owes 800K on it and has a second mortgage of another 100k. He probably hasn't paid any taxes in awhile. How do I find out if the title will be clean once I bid. Thanks for your help.

 

It depends - Some of the banks will pay for the back property taxes, some will not. The second should be wiped out however, sometimes, it might be advantageous to pay off the second (5-15% of value). This information only pertains to California for I am not familiar with any other state.

PM sent

 

great info! i wanted to ask this same question about the process and pitfalls.

 

The major pitfalls of buying non-performing assets and reo's is value and time.

 

Buying the note:

 

1) Depending on your source(s) pricing would be the first component. Then if the property is occupied you will have to deal with the eviction process.

 

Most people in this situation are in denial.

 

They think their loan mod is going to be approved even though, they don't have enough money for their escalade payment.

 

2)Because your the bank, there are several tools you can use to help the people occupying the home vacate the location

 

3)Bankruptcy - They can drag this out for a couple months, if they are smart bankrupt one spouse at a time, which will buy them a couple more months.

 

All and all it takes on a worst case scenario 6-7 months to get people out.

 

REO's

 

You pay a premium for these but most of the risk is already done.

 

 

Hopefully that helps.

 

 

Thanks for the info, great. The house is currently empty, I have been through it many times, perfect condition except for dead grass. The only problem I see is getting the cash by end of day. That is hard considering the property is about 800K opening bid. I have found out the time of the auction and the location but I can find anything else about the specifics of how the auction runs, deposit, timeline etc. It is not being held at the court house but instead at a civic center. I have called the reconveyance company and the publisher of the ad but they have no info. I have spent hours searching the internet but cant find anything. I am thinking I will just have to show up on a different day and see what happens.

 

 

I read that once it sells at auction that the leins are all cleared... any truth to that. I know he owes 800K on it and has a second mortgage of another 100k. He probably hasn't paid any taxes in awhile. How do I find out if the title will be clean once I bid. Thanks for your help.

 

 

What your going to do is not really a foreclosure auction then, but instead a private auction like you would see advertised on tv. This, at least in Florida, and once again I would imagine in most places, works a little differently than buying from the courthouse. Most of these auctions have financing instiutions there and dont expect you to pay the full amount for the property that day. They will want you to pre-register with their financing companies so that they know what amount your able to bid up to. The biggest negative is that these types of auctions are usually occupied by more end users of the homes and since they offer financing, the prices are not usually as attractive. In some cases, these houses can even go for more than market value as bidders tend to get emotional and it can become a dick measuring contest between people who dont want to lose. For this kind of event its going to be much more important that you figure out which company is running the auction so you can register with them as I dont know if you can do it day of sale. Also, in most cases, you will still need a deposit of around 10%, but it fluxuates with the auction companies running the auctions.

The major pitfalls of buying non-performing assets and reo's is value and time.

3)Bankruptcy - They can drag this out for a couple months, if they are smart bankrupt one spouse at a time, which will buy them a couple more months.

All and all it takes on a worst case scenario 6-7 months to get people out.

I am in the current process of trying to buy a home right now with this situation.

The bank had agreed on a minimum price to sell the home for,the owner then filed bankruptcy,delayed the bank auction and the home will now be in limbo for at least another 60-90 days. BUT the good news is the home is such a deal Im willing to sit and wait patiently.

The house I am looking at is unoccupied. I have been through it several times and it is in great condition. This house is definitely being auctioned by a private clearing house and not at the courthouse steps. The big problem I am having now is that I cant find out anything about the auction house. I have the location, day and time of the auction but nothing else.

 

I got a couple of good people on it, will keep you informed.

 

here is the link to the house.

 

http://tylermorgan.com/listings/detail.php?id=31

The house I am looking at is unoccupied. I have been through it several times and it is in great condition. This house is definitely being auctioned by a private clearing house and not at the courthouse steps. The big problem I am having now is that I cant find out anything about the auction house. I have the location, day and time of the auction but nothing else.

 

I got a couple of good people on it, will keep you informed.

 

here is the link to the house.

 

http://tylermorgan.com/listings/detail.php?id=31

 

 

Beautiful house, glood find...