Please ADVISE TODAY!
I am a Loan Officer who stumbled upon a prop that is being auctioned tomm. My company has a 'realistic' appraisal for $105k and we expect approx $50k to be the auction price. Should I drop everything and make financial arrangements to bid on this house or am I over reacting????
Appreciate your responses!
clear2close,
Glad to meet you.
Why are you wasting your time posting and not making arrangements to purchase this property?
Unless there is something you are not telling us go for it!
Welcome on board this board, I like the creative way of investing, however anytime I can purchase a property for 50% or close to it of market value, out comes the check book.
John $Cash$ Locke
John,
Thank you very much for the imput. I have a mentoring program that I am part of and I sent the same question to them. My mentor tells me to be leary of leins that could be on the property and not showing up til after the auction. Should I put a lot of stock in that worry, or is that just negative thought?
Thanks again!
clear2close
I am not clear why this advice was giving.
I am not familiar with the State Statutes where you are so I do not know if liens can attach after the auction or if they are still there when you bid on the property, a quick check on this will tell you. Never heard of this happening anywhere at a Court House auction.
John $Cash$ Locke
Now that all depends.....
Tomorrow, working as a loan officer will you make more or less than $50,000? If you'll make more, then stay at work. If you'll make less then I'd jump on this deal.
Many auctions require cash within 24 hours. Make sure you've got what you'll need. Sounds like a good find.
Now that all depends.....
Tomorrow, working as a loan officer will you make more or less than $50,000? If you'll make more, then stay at work. If you'll make less then I'd jump on this deal.
Many auctions require cash within 24 hours. Make sure you've got what you'll need. Sounds like a good find.
clear2close
Sorry for getting this on so late in the game for you but I feel I may have something useful here.
It is always a good idea to CYA by checking into possible snags in a deal and liens are real snags. John is right, (of couse that's why we depend on him) that liens have a hard time sticking once the foreclosure auction has taken place. The foreclosure usually wipes out anything junior to the lien holder who is foreclosing. If the property is likely to only generate $5ok at the auction this could cause a problem for you in one of two ways. 1) if it is not enough to satisfy the lien holder who is foreclosing then they may bid high enough to buy the prop themselves and try to sell it on the open market and get more money out of it. In this case though all that it would mean to you is that you just wouldn't get the great deal you hoped for. 2) Their are only 2 liens that I have seen survive a foreclosure auction: IRS and Child support. The IRS is as reputed the most powerful agency in America. Appropriately they have rights to take the first proceeds of the foreclosure sale even before the mortgage holder who is foreclosing. (This comes from an attorney who specializes in dealing with the IRS who used to work for the IRS. I had this situation almost hapen to me on a property I was researching) What happens in this instance is that if the foreclosing mortgage holder didn't find out about this before hand they can be in for a shock to find out that in effect they cannot sell the property. It is blocked by the IRS. Now technically they could sell it but the money first must go to the IRS and if the lien is big enough (as it was in the case I uncovered) then the foreclosing co. gets almost nothing if they go through with it. What has to happen is that everyone must wait in line for the owner to make nice with the IRS so they can do anything. In this case the worst possible scenario is that your deposit is stuck in that limbo. You don't lose it but you can't get it back until the IRS deigns to release everything. The good news is that it takes a lot to owe the IRS enough to stop up this deal you have before you but it is important to check all the possibilities.
[addsig]
Didn't make it to the auction. My son, ironically, needed to go to the hospital. The winning bid was $72000. I suppose it was the bank.
I want to thank everyone who posted their thoughts. Every time I look through these forums, I learn to avoid a new potential disaster. Love it here.
clear2close
Thanks for the update. it's good to have closure sometimes.
Great Luck,
KP
sorry... hospital.
All is well now.
Please would someone tell us what it means when an ad says, "The the owner will finance"!
EbonyAaron,
Glad to meet you.
This ad was placed by a creative real estate investor.
It means that the financing is staying in place from a seller the investor bought the property from. He is using this existing financing to sell to someone else who may not be able to qualify for a new loan.
As you read more on this board some of these ads you see and terminology you hear will start to become clear to you.
Welcome on board this board, don't think that any question you have is not worth asking, this is how we all learn.
John $Cash$ Locke
as cliche as it sounds, it's a good idea to have a few contacts at the local courthouse/tax claim offices, etc. you can find out a lot of information from people who are truly in the know about procedures and what happens. in my county in PA, a lein can be placed on a property up to a specified (the actual time escapes my memory at this moment...) time before the sale (tax or sheriff) after this time, there is no recourse for the leinholder.
it really just depends on where you are. be careful to collaborate what your mentor is saying, especially if he/she is not local! i usually call the local gov. offices and verify, just to be safe!
Good Post KP. A lot of good info in there.
Thanks!!