Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
I have been tracking the foreclosure sales in my target county (Passaic County, NJ) and am seeing of those that are "open" (many are adjourned) most are being sold to the plaintiff for $100. I suppose this means the lender ultimately did not sell the property at the sheriffs sale.
Any insight to what this means?
Meaning, do you think there were bidders and the bank thought the bids were too low so they refused them all and ended up back with the property?
Or were there not any bidders?
Or something else?
I wish I could make it to the courthouse to see for myself but my job prevents it.
Residential Real Estate Agent · Ocala, FL · Member since 2009 · 255 posts · 65 votes
13y
means the first bid got the house....nobody thought the house was worth 110 dollars. Economy is tough right now and nobody wants the liability of having houses that are awful.
Sorry my sense of humor, ignore the top.
The bank bought it back for the first bid, nobody wanted to bother bidding since most banks disclose their final bid amount. If the house is worth 50k and they will bid up to 120k, whats the point of bidding to 40k or whatever. Hurry up lets bid on the next house.
Residential Real Estate Agent · Ocala, FL · Member since 2009 · 255 posts · 65 votes
13y
means the first bid got the house....nobody thought the house was worth 110 dollars. Economy is tough right now and nobody wants the liability of having houses that are awful.
Sorry my sense of humor, ignore the top.
The bank bought it back for the first bid, nobody wanted to bother bidding since most banks disclose their final bid amount. If the house is worth 50k and they will bid up to 120k, whats the point of bidding to 40k or whatever. Hurry up lets bid on the next house.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
The note holder enters the default amount, P+I+costs of collection+allowable fees and that is usually the amount to beat by any bids. If there are no bids for any reason, the collateral is taken to cure that amount entered. When it is recorded many states do not require a purchase price or cost of acquisition to be entered for public record and $100 may be shown as the consideration for the transfer, it falls mainly on the idea that any transaction must have consideration paid to be valid, nothing more. The note holder is still required to obtain the highest price for the collateral to satisfy the debt and return over collateralized amounts back to the borrower, few make note or give notice of over payments or any notice of what value collateral was sold for. Such will be governed by state law. :)
Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
13y
My guess is it is something specific to NJ. Maybe the way they record the sale is how much was paid over the amount of indebtedness and the minimum bid is $100 over. When the indebtedness is more than the house is worth, no 3rd parties bid and it goes back to the lender for $100 over the indebtedness (minimum bid)
You can be assured that people are not buying free and clear houses for $100. That only happens at 2 am on channel 325.
Real Estate Investor · North Brunswick, NJ · Member since 2012 · 85 posts · 8 votes
13y
i just started going to the auctions recently and have seen this happen on many occasions. In fact I was recently at an auction in Middlesex where the woman representing the plaintiff was visibly annoyed asking for proof of funds because many people were bidding up the price instead of allowing her to just take it for $100.
But as stated before many proeprties are just not worth the upset price and no one bids and the plaintiffs gets it for the opening bid which is $100.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
@John McAllister Many of our foreclosures “sell to the bank for $100”, the reason is.....the bank announces/reveals the price they will bid up to (their max bid bid price, the minimum price they will let it go for). The statutory opening price is $100, no one is willing the price the bank will bid, so no one bids, so the sale price gets recorded as $100.
It used to be entertaining when our auctions were live, newbies would show up thinking they could buy all these houses for $200, since they were seeing “$100 sale prices”.
The reason the banks reveal this number is because they have to pay 2.2% fees on the bid price.....so they try to avoid bidders running the price up to $100k for no reason if the bank is going to $150k.
Something similar occurred with your property.....it’s not because nobody was willing to bid $2200.....they weren’t willing to bid the $100k or $200k or whatever number the bank announced.