Dusty Figgs has his head on a swivel. It’s a job requirement. Each morning he shuttles back and forth, from law office conference rooms to the steps of the Maricopa County courthouse. Figgs is a professional trustee’s sale bidder for AZBidder.com.
He attends trustee’s sales (commonly referred to as foreclosure auctions) all over the Phoenix metro area. They take place at 9a, 10a, noon, 12:30p and 2p. These auctions don’t just take place at the courthouse (and they don’t really happen on the steps – auctioneers and bidders sit in a covered courtyard just outside the entrance to the central courts building). Sales also go down in attorney’s offices throughout the city.
I asked Dusty to meet me at the courthouse steps yesterday because a bulk of the trustee’s sales in Maricopa County happen here. I wanted him to describe what it’s like to be a professional bidder and explain how frightening the process can be if you don’t know what you’re doing.
He said for starters you can expect to be bidding against 20-50 other people, most of them professional bidders. These bidders represent individual investors, primary residence buyers, second home buyers and small to large investment firms.
Each of these buyers has a different exit strategy. Sometimes they have no exit strategy at all. This makes acquiring a bargain extremely difficult.
If that isn’t enough to scare you away then there’s this – as many as 4 to 5 auctioneers regularly sell off multiple properties at the same time. Sometimes 300 houses, or more, are auctioned off each day. So, if you’re there to bid on just one house good luck figuring out which auctioneer will be handling the sale.
There’s about an 80% chance the house you want to bid on won’t go to sale that day. It will likely get postponed, perhaps because the owner is working on a loan modification or short sale. And if by chance the property does go to auction the day it’s scheduled there’s only a 30% chance the opening bid will be set low enough for you to join the fun.
Did I mention you can’t see the inside of the house you want to bid on? Or that without a title report you have no idea if you’re bidding on a first lien position loan, if there are any back taxes due, or if a homeowner’s association has put a lien on the property?
Phoenix is one of the most competitive foreclosure markets in the country. The courthouse steps are not a place for novice real estate investors or primary home buyers. I would argue that no public foreclosure auction, in any county or state, is.
I’ve been in the real estate business 10 years and I still hire professional representation for my auction buys. I would advise you do the same.