Purchasing occupied properties from auction
I’m doing my research in preparation for attending my first live auction of foreclosed properties. I’ve noticed that a few of the properties are occupied, I’m wondering if anyone has had experience especially here in Maine, purchasing occupied properties from auction. How difficult is it to get the occupants out of the property?
Hi Brent, here’s some things to check into before buying at an auction.
1. Is there a Buyer’s premium that will be added to the purchase price by the Auction House. Many times it can be 5% or more.
2. The terms and conditions of how you will be required to pay for the property.
3. If the property is occupied, what are the costs and time requirements for an eviction ?
4. If the occupants are cooperative, you might be able to get them out faster with a Cash For Keys agreement
5. Make sure to have a healthy budget for repairs
6. Be aware the the Auction house is very good at pushing the price up. I have seen lots of people pay too much for a property “ thinking that they were getting a deal by buying at an Auction “
7. Do your research, know your comps, check the title for any new liens or judgments and be patient. Many times, the better deals are found towards the end of the Auction
Good luck
@Winston Covington
Thank you for the information. We have been flipping for about six years now, this is the first time we’re trying out the live auction route. Most of the auctions in Maine are not heavily attended, not worried about over paying or not accounting for repairs. Glad you highlighted those aspects, but they won’t be a problem for us. As for fees, it’s $5,000 at the door and 60 days to close. My only concern is the occupancy part. I am thinking I will not be I’d on any properties if they are occupied, simply because I do not understand the process enough regarding how to get them out and when you can talk with them.
Regards,
Brent
In Maine you would have to go through the eviction process. If there is no lease you can serve a 30 day notice. It isn’t a big deal but I would reserve a court date as soon as you serve notice as they are backed up. You can always cancel the date if not needed. Many times the people will leave. A bigger concern is the damage that they could do on the way out. Often times they are vindictive so figure that into your bid. I usually try to talk to the people before you bid to get an idea of their attitude. You can go on to pine tree legal web page for eviction process. The timing of notices is critical. If you follow it exactly you will win if not you will lose.