Auction Play By Play

Comments(13)

• 
  Lethe7th October, 2003

  I understand your trepidation. Here is what happened at the first auction on our county steps that I attended.
  
  The auctioneer gets up and reads of this page of notes in under 30 seconds. (that in itself is a trip). He opens that bidding at a set price - normally what the deposit fee was set at. The bidding is rather calm. A few people may bid, he will ask if anyone else wants to bid, checking with each person to make sure no one has been overlooked, and then say it has been sold. Normally the bank rep is on hand to open the bidding at the deposit price, then may drive it up a bit to cover other liens that may or may not exist on the property.
  
  The deposit check is only required if you make the winning bid. Otherwise no need to turn anything in. (At least that's what happened in this auction).
  
  I had attended one auction where I knew the max I was willing to spend and the opening bid was already $3K above that. It twas rather interesting all in all.
  
  Best of Luck!

• 
  Vern7th October, 2003

  Hello the_acrobat,
  
  Yes, it is as you picture, except for the paddles (smile). I have gone to two auctions and got the winning bid on both. I made a 9k bid in March and sold it for 30k in November of the same year. On the second one, I paid 96.8k and it appraised for 125.8k six months later. I have this one rented as sfh.
  
  There is minimum selling price, (even when sold at absolute auction). They play a game like this: The auctioneer will have several of his buddies out in the group that will start the bidding and jack it up to the least that they will except.
  
  Also there is a 10% add on fee, for some auctions. Good luck. Be ready to pay 10% of winning bid on the day and the rest within 30 days.

• 
  rwwrrr8th October, 2003

  Each county has its own rules. Here we have to pay the full amount with cashiers check (made out to yourself) sign over to trustee. The trustee will check funds of all bidders before sale starts. Don't get caught up in the bidding. Know what your top price is. Go to the county assesors office, likely if they haven't paid mortgage, they haven't paid property taxes either. Some counties wait until taxes are behind 5 years before they foreclose. Look for judgements and liens especially the dreaded dead beat dad lean. Those don't go away here.
  Don't try to be anyones friend at the first auction. This is business. Whom are you going to have the property titled under? In Cal. they take 3% when you sell the property...
  Have fun
  This is the best part. Well except for selling the property.

• 
  InActive_Account8th October, 2003

  I know this will fall on deaf ears, but my advice is---- do not to bid at this auction. My advice is "To leave home without". You should attend several sales before you risk your bankroll.
  
  All your questions are specific to the state foreclosure laws and customes of the county. You need to keep your eyes open, your mouth shut, and your hands in your pockets. Where I buy, the pros will eat you alive and make your purchase a very expensive learning experience. Be careful

• 
  rwwrrr8th October, 2003

  Yeah thats not bad advice. I sure didn't buy my first time. Then again I think it may have been the 10-15 time...

• 
  the_acrobat8th October, 2003

  Thanks for the sound advice, Sammyvegas.
  
  I have a max figure in my head which I absolutely will not go above. Chances are that number will be blown early in the auction so I'm not concerned too much about making a mistake. The only risk is my ambiguity about secondary liens on the prop. and what happens to them after the auction. I'm going to contact the attorneys handling the foreclosure prior to the auction to try to nail this down.
  
  So what do you mean by "Pros will at you alive?" What does that actually mean? If it means they will outbid me, after my top figure is exceeded, let them eat cake, I say, for they have no teeth. I'm done! Unless you meant something else.
  
  And to rwwrrr - Thanks for the tip - I will visit the assesor's office and the registry before the auction tommorow and find out the property's tax bill and see if there are any judgement docs registered. It's all around the corner from the auction itself.
  
  I really appreciate everyone's extremely useful and generous advice.
  
  -presley

• 
  the_acrobat8th October, 2003

  To all,
  
  For your entertainment...
  
  So I went to the auction, showed my check, read the legalese, looked over the tax bill , which was provided with the legalese, and signed in.
  
  Property is a 90-110 FMV single family, two story house.
  
  And the bidding began.
  
  It started at 50 and blew past my number within minutes, ultimately going up to 90. Auctioner looked at everyone and asked for any more bids. Silence. He then looked at the bank rep who was also present and she bid the exact amount of the outstanding mortgage, $105, 649.81. Bank won the auction.
  
  I got her card and the name of the REO manager.
  
  Friends tell me this is how it always plays out. Since everyone refi'ed their homes in the 90's no-one has equity and banks hold huge mortgages . Bank always outbids everyone b/c they have to cover their exposure which almost always exceeds a wholesale price.
  
  Can anyone advise on best way to contact and negotiate with the bank REO desk post auction?
  
  Thanks,
  
  --pa

• 
  rwwrrr9th October, 2003

  Yeah the bank has to protect the $$$'s even if the property isn't worth it. Doesn't make any sense.
  
  You should start a new string on contacting bank for REO's. Have seen quite a few lately and thought that might be another angle.
  Keep Looking...

• 
  chrisxg2063631st October, 2003

  I found recently in our area, the REO will go on the market (usually listed with an agent) unless it is a true dog it will sell quickly for FMV.
  
  Of course we have been in an incredible seller's market.
  
  I have seen several go on the court house steps, and have picked up a few. I found that one of the local auction companies has a section of their website that ells you what to expect at the auction, and what the risks are. One of your local auctioners may also. I have come to accept that if I am going to find a property worth buying in our market that it has to either come from the court house, or from the seller before it gets there.

• 
  omega121st December, 2003

  rwwrrr,
  
  If I understand you corectly,
  
  1) you check for liens on all the proerties you are trying to by at County Recorder's Office not with title companies?
  
  2) Where do you get your listings?
  
  3) How many days in advanse are you going to check liens on the properties you'll try to buy when they come on sell?
  
  You also sad:
  
  "In Cal. they take 3% when you sell the property.."
  
  4) Do you mind explaining who are they?

• 
  Lufos21st December, 2003

  In a foreclosure of a property here in Los Angeles County, State of California.
  
  The Trustee (man holding sale) first qualifies all bidders. You show your Cashiers Checks, Money Orders, Cash.
  He writes down a figure that is your top qualified amount.
  
  The Trustee then announces the sale and describes the property by its legal description and may if a talent, add in the Assessors Numbers.
  
  After which he says something like."On behalf of the named Beneficiary, I herein offer for sale all title and right blaw blaw.
  He ends up "On behalf of the Beneficiary I bid the sum of: $ whatever. That is the unpaid balance plus interest to date and expenses of the sale. Unless instructed by Bene to bid short. This is the first bid.
  He then calls for other bidders and if it is a good day the bidding begins. The normal Trustee (like me) lets the bidding procedure and does not interject for specific amounts to be bid on each raise of a bid.
  
  It continues on until nobody else bids. If the Trustee is a talent, he then says, "No other bids? Going once, twice, third and last time sold for $-------- to the large man in the Mickey Mouse Suit." He then asks the winner to step over and accepts his checks. Thats it. Stop.
  
  At that moment under California Law the sale is final, except cause we love our Uncle, the IRS or Calif Franchise Tax can upon proper notification of the sale which of course has already been done overbid the sale and take title.
  I have only seen this done once during the last 40 years. Of course the Trustor was a Democrat. Also all Junior Liens, judgements, tax liens you name it are gone fini she is clear in the upper story. This includes Child Support. The lien is still there but not against the property. The poor errant father they will still pursue. Lien his salery, take his car, frighten his children whatever, but that property is freed. You got it for what you paid. Of course the present Real Estate Taxes may be a smidg delinquent. But you knew that when you pulled Your Prelim title Report or if you are super clever, you got the title Order number of the Trustees Policy prior to sale and queried it for any strange items. You didn't, God I am going to have to train you some more. This time you pay for the beer.
  
  Now you own a house. Oh the tenants that are there or the three Gypsies telling fortunes on the front lawn, you now have to evict them and for that you type out a bunch of junk, serve proper notices and then file and Unlawful Detainer Action and get a Writ of Possession, Abstract the Judgement and the Sheriff fully armed does in time for a fee throw them out. Now is not this fun.
  
  Whenever I attend a foreclosure sale, I always feel that I have failed, I should have had the property before. To do that is a whole other story.
  
  For those of you who care, the approach to REO's after sale is beginning to change. One actualy called me, instead of his usual stilted profanity he called me Mr. Foster,he still thinks Goniff is my first name. He asked could I give him a little time, he had a matter concerning a house that he thought I might be interested in.
  
  Sniff the wind, I smell a change in the market. At least here in LaLa land. Yes that includes Beverly Hills. I hear they are moving all the sales to Nat and Al's save my table, you know up against the wall with all the other AltoKockers.
  
  I hope this is helpful Lucius

• 
  the_acrobat21st December, 2003

  chrisxg20636
  
  I totally agree that by auction time we're talking no bargain except for rare exceptions when, as is the case in January in my locality, the foreclosures are coming so fast and furious they are 1/2 hour apart on some days and you might find a deal just because of the sheer volume of properties in trouble - but who has the stamina for all that running around back and forth to the assessors, the registry for title info, and bank for certified checks?
  
  Can you tell a little about your methods "on the courthouse steps" for grabbing properties up for foreclosure?
  
  Thanks,
  
  -presley

• 
  WheelerDealer21st December, 2003

  Here in my county there can be more than on trustee mumbling at the same time (no microphones) so in order to be listening in three different places you need three people to do this. there is no bidding by proxy. however, there is a service that will bid for you for a fee they have several reps at the sale and this is their biz to do so..they charge 500 dollars.
  [addsig]