Question Regarding The Foreclosure Process?
I recently went to a foreclosure sale and was not sure how someone eventually pays for the property. In my county, once you are the highest bidder, you give them a 5% deposit and must come up with the rest by 3pm that day.
Questions:
1. Does the county give you a contract and you must go and find financing for it and return it that same day?
2. Should you get prequalified and then go back to your lender once you have won the bid?
3. Can a lender give you the check/funds by 3pm that same day?
Any help appreciated. Thanks! 
Do not give 5% deposit without having lender beside you saying lets go to the bank and get the check. Bidding all cash at the steps you will have to have the cash in your posket. I have taken the lender with me and signed all the documents at the courthouse and basically did the closing within a few minutes and gave the trustee the check within an hour. Most bidders have funds already in their position in the form of a cashiers check. There is no way to get the money from a standard lender. Most investors use private funds or hard money lenders or their own funds.
Good LUCK and Thank You
Hope this helps some
Ted Jr
My experience is similar to Tedjr's. In CA it is a cash offer on the courthouse steps. Foreclosures are by nature a cash transaction. They can't have a sale and give you a long time to come up with financing since if you can't the sale falls through. You need to have your financing lined up before the sale. I used to show up with a carefully crafted collection of cashier's checks so I could bit in thousand dollar increments in the range I was willing to pay and hand over the exact amount in cashier's checks if I was successful. I did this with a line of credit at the bank.
I hope this is of some help.
Regards,
Ed
l third the previous sentiments. Unless you want to forfeit the 5%, have your ducks lined up. How much time do you have between when the sale properties are announced and the sale itself?[ Edited by norrist on Date 01/03/2004 ]
You may want to attend a couple more and ask questions of the buyers to investigate the process as well. The rules are different in each of our 4 or so surrounding counties! Good luck!
[ Edited by norrist on Date 01/03/2004 ][ Edited by norrist on Date 01/03/2004 ]
Ed is as usual right on and I must say I am envious of his array of large amount checks. I also used to attend the sale but my checks were much smaller and ended up in $100 amounts for that great moment at the end of the bidding when I make my last and final bid. Usualy at that moment I have to take my shoe off to gain that last little bit of cash. Of course this tips my hand with shoe in hand they figure I am tapped out. Of course out comes one more bid and this time I reach into my belt, opening the zipper at the back and extract another $100. I win the bid as the others are too disgusted with my antics to play anymore.
California is I think very advanced in the requirement to qualify prior to bid. As one Trustee explained it to me. "Look around you would you trust any of these people here bidding to come back after sale to settle up?" He had a point.
Cheers Lucius
Thanks for all the input. I did notice many people there had numerous amounts of cashier's checks in different amounts as well as cash.
If I do purchase, I think I'll be taking the line of credit route, take cash or cashiers checks for the initial deposit, and then go downstairs to he nearby branch and make out a cashier's check for the remainder.
After the deal is done, it shouldn't be that hard to take out a mortgage on the property and pay off the line of credit right. Sounds good.
Thanks again all. This is a great site.
orbis,
Just to extrapolate a bit, using a revolving line of credit is a great way to pick up equities such as foreclosures since you are buying at a discount and can refi your cash back out. The remainder of the algorithm is : Repeat... ad nauseum!
If you have equities somewhere, a great source is a Home Equity Line Of Credit (HELOC) because of the very low interest rates.
Best of luck at your next sale.
Ed