Financing an auction.com property

8 Replies

I am looking at a property on auction.com and the listing says: Conventional Financing Not Available.

Does anyone know if this contingency is based on the time that is required to close or whether it is just a protective clause in case there is a cloud on title and financing would not come through.

I have a hard money loan lined up for it and would plan to back into a mortgage as the property barely needs any work. 

Curious if anyone has been able to win and auction.com and line up conventional or FHA financing in the timeframe that auction.com requires to close.

Any information would be appreciated.

@Sebastian E. ,

I believe it's just needed on a cash basis, so if you have the cash, or finance the cash, it doesn't matter.     If you don't have the money to close in time, they will likely keep the initial deposit.   I think it's their way of saying that they won't be working with a bank or doing inspections, it has to be a simple transaction. 

@Sebastian E. It can be done but only under certain circumstances. Auction requires you to take the property as is with no guarantees of possession and you cannot access the property. That makes doing an appraisal for a conventional or fha loan almost impossible. If you use a rehab lender and they are fine with a drive by appraisal, you can maybe get it done. 

So this property is a little unique in that it has a lockbox on it and they are doing showings, so I was thinking once I win the auction I just go ahead and my loan officer to get started on the paperwork and I should be able to get in to do the inspection.

@Simon Ruiz yes I just went ahead and got financing. You just don’t want to get into a situation where you can’t get your financing and your deposit back.

@Sebastian E. What was your time threshold to generate the funding for the sale? and how did the lender organize it? I know the lender sometimes puts there own name to the deed to make sure collateral is in place as quickly as possible... and yes I agree not losing the deposit is critical for repeat business...   

@Sebastian E. So how were you able to line up the hard money loan if there was no collateral in place? I have read that you need a contract in place first before they can consider you for a loan is this true?

Originally posted by @Sebastian E. :

@Simon Ruiz yes I just went ahead and got financing. You just don’t want to get into a situation where you can’t get your financing and your deposit back.

 Can you provide updates and tell us what you did and how it worked out for you? What type of lender did you end up using? Did you win the bid? What documentation did you need to provide to auction.com for the financing? Did you get an inspection? How long did it take for you to secure the financing (from app to close)? 

Would love to hear :)

Erin