Courthouse Property Sales
I am posting this message here as I have received no replies while this was in the Foreclosure forum.
Hopefully somebody will be able to answer.
Hi everybody,
My husband and I went to our first courthouse auction. Neither one of us understood whay everybody was there. Nobody bid on anything except for the bank, they bid $100.00 only.
There was one guy there that was a hard money lender he said and apparently he had a house that was being auctioned off as well, He bid $100.00 as well.
My questions are 1. Why did nobody else bid? and with that question, Why was there so many people there (30) ?
2. If I were to bid $101.00 would I have won that property and if I did win it what would have been the mortgage? $101.00?
I bought a book there that shows all the sales and in it it lists (for example this Hard money lenders house)
Date to be sold: 3/19/2004
Final Judgement: $67,621.12
Total Assessment: $50,900.00
___________________________
Equity $(16,721.12)
Loan Date: 10/19/2000
Mortgage Type: BALL
Original Loan Amount $46,500.00
Intrest Rate:16.5%
Monthly Payment: $639.28
Loan Balance: $46,500.00
Last Payment: 9/1/2001
Prior Sale Date:10/1/2000
Prior Sale Amount:$0
Where did this Final judgement price come from and what does it mean?
What would I have to pay for this house if I was to bid $101.00 and won?
What would happen to this property if the guy that loaned the money on it did not bid?
Also, I see a house that goes up for sale on the 22nd of this month and would like to have it, should I go see if the owners are there and try to offer them and the bank something?
Thank you
Pam
The reason no one answered your post is that they didnt have an answer for you. In short neither do I.
You need to hit the books again. Not being sarcastic, just realistic. There are many reasons that couldve happened, and I dont know enough about the sale to give you just one reason. Obviously the lender and banker are there to secure the interest in the loan.
If the lender wasnt there I am sure it would have been a bidder frenzy amongst the thirty people as they would have gotten a property for pennies on the dollar. Land is still plentiful out there so anything without a building, isnt worth wasting your time on unless it is waterfront or commercial or holds some sort of hidden value.
The lender starts his bidding at (roughly) 46K. The amount of the debt he owns. If he werent there, then his debt would have been erased if it were a tax auction.
If you can secure a house before it gets to auction, it is a safer bet. Albeit more expensive than getting at the tax auctions.
There are bird dogs in your area that you could hire to do the lien/title research and split the profits if you want to put up the monies. At least until you have a better understanding of the process, you would have a guide to work your way through the first one.
Kyle,
Would you know of any bird dogs I could contact here in Pinellas/Pasco?
Thank you
reprincess. I am fairly new too, but this is how i understand it. Lets say the banks is owed 50k, and the house is worth 100k. The bank has the right to take the house back, and the $100 bucks is just basically the minimum they can pay to make it a legal transaction. The bank is going to "bid" up to 50k. Think about it. The bank is paying 50k for a house. And who does the money go to? The bank. So when they bid, they are paying themselves. They arent really losing anything. If you bid 101, they would just look at you and laugh, because they are going to pay up to 50k for it no matter what. They want their money back. If someone bids 75k, the bank is NOT going to bid any more. The bank gets their 50k, and the 25k extra goes in the courthouse pot for the person in foreclosure to claim... they dont just cut them a check. The bank cant make money off this transaction, they can only take what they are owed.
So on a 100k house with 50k of equity, you as a bidder could come in, bid 50,001 and get the house. The bank is paid off , they are happy, you get a house with 50k of equity. You are happy. It is very unlikely you will get the house for any LESS than what the bank is owed. This is assuming of course there are no other bidders (besides the bank and you)... On 50k of equity, more than likely ,you will have other bidders there. Depends a lot on the property and the area you live in, of course.
Hope this helps[ Edited by rebloodhound on Date 03/22/2004 ]
Thank you very much REbloodhound. That was explained great!
I will have to attend more of these to see what is happening. I went to another one today in St Petersburg and the house I really wanted was not being sold anymore. I did some checking and found out that the owners filed bankruptcy.
I used to do this quite a bit for an investor in cali. One of the reasons no bid was probaly the house was in a bad hood or wasn't worth much more than what was owed to the bank. so always do your homework.the bank usaly has the 1st and maybe the second so you need to know exactly which note was being forclosed on. also in cali in order to bid you had to show the auctioner that you could back up your bid Me my style was to show up at the auction with cashiers checks anywhere from 40k to 100k in my brief case in different envolopes broken down into 5k to 10k so if anybody there where looking over my shoulder they would think thats all I had. it can be a dirty buisness. Anyway I'd show the auctioner only one of the checks to prove I had the ability to bid see now nobody knows what you've actualy have as far as cash for the deal so it leaves them all wondering. when biding starts look and watch how people start to act learn to read people it will help. dont start biding right away see how fast people start themselves if its fast and furious it could mean its a battle then you got to deside how bad do you want that property and how high are you willing to go to make a profit. If you want to bid. ME I like the old 1 penny more thats all I would say " 1 penny more" yes you can win with just 1 penny. I've done it alot don't say anything else. yes you will piss people off but your not there to lose and it will start cuting out biders cause they start to think ok this one all he/she is going to do is keep up this one penny sh_t. you follow me. I.ve blown banks out of the water just by going one penny more than there note was for. I've had autioners tell me that there not going to write a check for change ie .99 cents because when you pay with cashers checks they have to write you one back for change. then go to $1.00 more and keep it up every time somebody gives a bid just say "1 penny more"or " dollar more" nothing else. but do be nice while underneath your a tiger ready to pounce. the best advice I can give you is do your home work on the property and go to as many of the auctions as you can just to watch you'll start recognizing bidders from other auctions watch how they bid learn there style make friends but keep your enamies closer. somtime if its worth it you can partener up with a person if you both can make a profit. Have your lawyer draw up a little simple limited partenership agreement just to do this deal and have it with you so you both win when you or they dont have enough funds. you can sign it on the spot even during the biding. Also Have fun!!! I loved it! Good luck!!!!!! :-D
Thanks gunhead5. Your experience and info has given me much to think about and some new techniques to try.