So, there's a house that Mr. AZ and I looked at last year that was listed for over 400K and is now up for auction. The loan balance is under 300K, so we're considering going to the auction. Problem is, we have no idea what we're doing, have never been to one of these courthouse steps dealies and wonder how difficult/risky the whole thing is.
The house is in pretty good shape and is probably worth the loan balance, but (IMO) not very much more. Any wisdom or advice?
This message has been edited. Last edited by: Daisy in AZ,
Posts: 220 | Location: Arizona | Registered: Mar 14, 2007
"Daisy in AZ," There was a thread a while back entitled "Buying a Foreclosure" I just "bumped" back to the top that you might find helpful. OP was "Ventana."
The thread kinda went all over the place but, if you read through all of it, you may get some ideas to get you started. Most important is to make sure you get your own home inspection before the auction if at all possible as those sales are almost always "as is." Good luck.
Here is what I heard on the Today show the other day. 1. Inspect the home prior to going to the auction. 2. (if a multiple house auction) Bid on the first set of homes,in your case I don't know if that applies to you, but the reason they say to bid on the first ones is b/c the other rookies will wait to bid on the other homes, and the homes in the begginning of the auction always sell for less. 3. Back away from a bidding war. Wait for things to cool down before placing a bid. 4. Go in dressed to impress. Wear a business suit and look rich. Other bidders will think you are from the bank or some rich investor and they won't mess w/ you. 5. Have a budget in mind. Don't overbid, you'll be in trouble financially-duh. 6. Be sure this is the home you want to purchase and make sure you have the cashiers check in the amount disclosed with you at the auction. 7. good luck.
Let me know if anyone thinks this is good info. I remembered most of it, and I am pretty proud of my memory
Go to your c o u r t h o u s e(if that's where the auction is going to be held) and find out the procedure. There is usually an inspection period before auction.
It can vary in different states.
Give yourself a limit to avoid a bidding w a r.
You will need a pre-qual letter for the top limit you plan to spend (to cover yourself) in case you have to go up.
You will need a Cashiers check for x to bring with you.
Thanks! The auction is on Wednesday, so I don't think we'll have enough time. It also appears that the property has about a zillion leans on it -- two mortgages and 2 big ole HELOCs. All told, they add up to way more than the previous listing price. What were these people thinking?
We can't quite figure out what happens to all these loans once the property is auctioned. Perhaps we'd be better off with an REO.
This message has been edited. Last edited by: Daisy in AZ,
Posts: 220 | Location: Arizona | Registered: Mar 14, 2007
But, I do have a good idea for you. Go to the "auction" (myself, I'll bet it's not an auction but rather a foreclosure on a Deed of Trust...but I digress)!
Anyway, attend whatever it is, ask questions of everyone you see, figure out who is in charge, get business cards from those people and follow-up after the event to make some contacts.
That way, the next time a house comes up that you are interested in, you will have a better idea on how to get a running start! Good luck!
I doubt there is an inspection period, this isn't a gimmick foreclosure auction this is a trustee sale and the bank doesn't own it yet.
In California these are all cash (cashiers check) transactions at the courthouse steps or they go back to the beneficiary.
If you really want this house, find out who gets assigned the listing from the bank (which realtor) and communicate with them. Maybe post a note on the door or in the mailbox, drive by after its been repossed and see who is working on the house and get a name, etc.
That's what we're thinking caroeib, and I like the mailbox idea.
Does anyone know what happens to all the various secondary leans and unpaid property taxes owed on a house if you purchase at one of these trustee auctions?
Thanks again,everyone!
Daisy in Bubbleland (settling back into wait and watch mode)
Posts: 220 | Location: Arizona | Registered: Mar 14, 2007
The liens are removed through the foreclosure process when the mortgage insurer pays out. This why S/Ss with multiple lenders seldom go through.
Someone mentioned that S/Ss can not be bid on by investors in CA. This sound specious at best and may have just been someone trying to get me to bid on S/S instead of waiting for the REO. Something to do with bonds that even I didn't get.
Does anyone know what happens to all the various secondary leans and unpaid property taxes owed on a house if you purchase at one of these trustee auctions?
Mechanic liens wouldn't get wiped out, they would be have to be paid. Same for taxes. There can also be clouds on the title that wouldn't be resolved just because the house was foreclosed on. I would just attempt to get clean title from the bank and let them deal with all the other issues.
I'd definitely get your research hat on and be prepared to learn a lot before diving into that world. It is very layered, there are a whole host of issues depending on who is foreclosing and what is going on with the property. Throw in the financial liability with no recourse if you are wrong, it's not something to take lightly.
Originally posted by caroeib: Mechanic liens wouldn't get wiped out, they would be have to be paid. Same for taxes. There can also be clouds on the title that wouldn't be resolved just because the house was foreclosed on. I would just attempt to get clean title from the bank and let them deal with all the other issues.
I'd definitely get your research hat on and be prepared to learn a lot before diving into that world. It is very layered, there are a whole host of issues depending on who is foreclosing and what is going on with the property. Throw in the financial liability with no recourse if you are wrong, it's not something to take lightly.
That's what we were afraid of. [...and as someone who misspelled 'lien' multiple times in this thread, I'm not entirely sure I'm up to multi-layered financial subtleties.]
Fortunately for me, there's Mr. AZ.
Thanks, again.
Posts: 220 | Location: Arizona | Registered: Mar 14, 2007
The whole process is confusing, I've talked to a major REO RE broker and asked him some very pointed questions and he had no idea. The reason why some liens don't get wiped is that they are senior liens even if the recording date is later than the liens junior to them. Taxes are an example of this. Usually the recording date rules for lien priority unless there is a subordination clause in the contract but the exceptions are taxes and some mechanic liens.
I was going to check the courthouse auctions out but in my research I found that even though the banks were discounting in some areas the risk versus reward wasn't worth it for my particular case. I'll post a link for trustee sales for California later tonight, it's free and useful to see what the trustee was asking at the sale and what sales are upcoming.
Excellent. There seems to be activity here but not the kind that seller want.
I went to 2 open houses on Sat. The first one was a regular 2500 sqft resale on the expensive side at 399k. It was built in 1988. The same model, right across the street had a fresh NOD posted. Also, there is a new development about 3 miles away where 2720 sqft new houses with all the incentives have been marked down to 324k. Guess what is moving?
Second open house was in an older neighborhood. It started at 325k a month ago and is now down to 250k S/S. I know the next door neighbor and the realtor was talkative. Nice family, nice neighborhood but the owners had one of the early vintage option arms and they've already left the state due to the cost of living. They had to have an offer that weekend to stop foreclosure. A neighbor down the street offered 190k because they want it for a rental, bank countered. Buyer was going to finance the purchase through his Heloc which he just received notice that was cancelled. Opps, deal went poof.
Agent called me this morning to see if I was interested at 195k with max seller contribution and zero closing. If there wasn't a pool in the backyard (and it took up the entire backyard!) I might have countered at 180k.
Banks are definitely motivated, the enviroment isn't getting better anytime soon (WAMU just announcing its closing of its wholesale lending division) and in truth its still not a bad enviroment from a lending POV. If this was a true credit crunch things would be much worse.
In my local area its all about short sales and foreclosures, everything else is sitting unless the sellers are very aware of the current market conditions and pricing accordingly.
Great site Caro! I recognized a lot of the auctions coming up but there were more then a few surpises too! Our local golfcourse development is apprently in really big trouble.
Originally posted by real estate lady: WAMU - good ...anything of theirs is closing.
They completely ignore the mortgagors who are looking for solutions on their mortgage or trying to make arrangements., including re-fi.
The 2 issues you are missing in regards to WAMU is that they were one of the few major portfolio lenders left, they had major niches that won't be available to brokers anymore. The second issue is they were a significant warehouse line lender, so many small lenders who used their warehouse lines will no longer have those funds available to them. In a 2 or 3 months we should see another wave of small lenders imploding in regards to this.
Yes - understand the issues.. not missing a thing.
... any corp. that doesn't understand the "importance of customer service" has no right to be in the industry .. any industry....whether retail, wholesale or otherwise.
