when attending auctions

Question

i have a couple of questions . 1. at auction you are looking to buy a certain property the claim amount is $65,000 will the auction start at $65,000 are lower ? 2. will there be people from the bank that is foreclosing on this property be there to run the bids up to what they will like to sell the property for? 3. once you are high bidder on a property is there a certain time limit that you have to have the loan approved for or do you have to be approved before you go ? 4. do tax liens get auctioned at the auctions to ?

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Hey donicomeaux,

Out here in California, we have a few guys that attend the auctions and bid on behalf of the 2nd or 3rd Bene.  These people get a 10% premium of what they bid the property up for from the Bank.

Boy I wish the TD's were only 65K out here,  The minimum is usually around 400K.

I only buy if the equity is 125K or higher.

Good luck.

Foreclosureboy

Toney NA · Answer

REOs are typically sold like any other listed property.  They are represented by Realtors who sell them.  If you're looking to buy one, you can contact a real estate agent, or search the banks directly.  The ones that list properties on their websites usually list an agent that is representing the property as well.  They have a great directory of bank REOs here at Biggerpockets to help in the process.

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Is there a away to get the REO's directly from the banks and not wait for the auctions ?

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thank guys this helps fill in some holes for again thanks for the input

Jason Shaffner · Answer

1. Depends on the auction.  I've been to auctions, usually on the weekends, where there are a hundred people looking.  I've also been to auctions where there are only two or three of us there and only one of us is bidding.  As jedi said, most states have regulations regarding RE auctions.

2.  Usually yes.  There are also sometimes subordinate lien holders trying to get their money back as well.

3.  Its best to have access to the money prior to the auction.  Most require 10% or more at the close of the auction with the balance due anywhere from 48 hours to 7 business days.  Call and ask.

4.  There are courthouse sales, tax liens, utility liens etc and then there are public auctions usually for REOs, foreclosures etc.

Best thing to do is go to a number of them and watch and learn.

Good Luck

NavyDoc

Jason Barnett · Answer

Most likely there is a legal minimum for your state and this will be the opening bid for the property.  For example in Ohio the minimum bid is 2/3 of the appraised value of the property.  Quite often the bank will bid up the price to whatever is owed to them on the loan and if there is a second lien then that lender might also bid the property up to cover their losses.

Most likely you can just call the county courthouse and they will tell you all about the auction rules... after all, they WANT to sell those properties for as much as they can and that means they need buyers like you.