Opening Bid
I inquired today about an opening bid. They say that info is priviledged. Are there any formulas for figuring this out?
305K unpaid principle
360K + after ALL fees
382K county appraisal
425-450K BPO
Thanks for your help!!
mum of 3[ Edited by 3wildkids on Date 08/05/2004 ]
It's pretty simple. Only bid what you are willing to pay.
My guess is that they will bid their full judgement amount plus any acured interest and fees as their position is property secured and there is no reason for the bank to bid less.
3WildKids.....
Finding out the opening bid is useful in determining if a sale is worth pursuing.
In Missouri we have the "Trustee" system of foreclosure. There are about 4 large Missouri trustee/foreclosure companies that are hired by foreclosing lenders to manage the foreclosure process for them. They probably do 80% of the foreclosures. The other 20% are done by low volume law firms.
Getting to your question, each legal notice anouncing a foreclosure sale lists the trustee and company handling the sale. Usually they give a phone number or web site. If they just identify themselves, I get on the internet and track them down.
I have made at least 50 inquiries on what the opening bid will be on a sale and have NEVER been told that info is a secret! Usually they say contact them a couple of days before the sale to find out because that is when they get a final number from their client, the lender. Those that have a web site will often post that opening bid amount.
Maybe it is different in your state.
Larry
Hi Larrygs,
New at this, so Please bare with me. What if no one bids the amount they require for opening bid? I was told by somone (not educated in foreclosures)
that whoever high bidder was, would get the property, regardless of what bank had as opening bid. True? Thanks in advance. Rick
Rick....
The lender's opening bid is the amount the lender has set to recover his investment in the property (unpaid loan amount, unpaid interest, hiring legal help for forclosure, forclosure processing and sale costs,etc.) That is the MINIMUM selling amount. If someone bids $1 more than that and no one else bids, that someone is the winner and will receive a Trustee's Deed on the property. See my questions on my new topic, "What's Best Way Of Negotiating for Lender REO's?"
I just investigated a property being foreclosed on based on a loan of $56,000 made ONE year ago. I've learned that the opening bid will be about $61,500. That demonstrates how the lender's costs can jump during this process. Buy the way, this property would likely be a good buy except I am uncomfortable with two things:
1) The property is occupied and I don't like the idea of having to go thru eviction process. (See my topic on Missouri eviction question.)
2) I found at the court house that the owners have about $10,000 in court judgements against them and I'm not sure to what extent they represent a lien on the property.
Larry
There is no formula that will work everytime for an opening bid. This past week the opening bid on a property that had a mortgage of 250K taken out last year(2003) was 207K....instant equity.