Need help setting the upset price for my property in Sherrifs auc
I have carried the note on a piece of land for 2 years and the buyer has defaulted.. He has defaulted because of a $50,000 construction lien. We are getting a summary of judgment and the property will go through a trust sale or more than likely a sheriff's sale.. I really want to hold on to the property because of the improvements the buyer made to the property,have made it 2x more valuable than I originally sold it for. I am hoping that I can set the upset price high enough that no one will bid.
1. I'm wondering if there are any disadvantages to doing this to doing this. I am owed $315,000 on the remaining balance balance but the property is worth $900,000.
2. What cost will I incur by setting the upset price high enough it's not worth another person to bid?
3.Will I owe any difference by setting the upset price so high?
4. Will I owe any money to the the sheriff's department to get the property back?
5. How will the lien play into the upset price or the fees after if I am able to recover the property back if it does not sell?
6. What is the smartest and easiest way to make sure I get my property back?
We we are being represented by an attorney for this. The problem is they won't talk to us for 2 more weeks and I would be lying if I wasn't saying the suspense to the answer of these questions wasn't killing me. I am also trying to get a second opinion as well well so we can totally believe in what our attorney is doing for us and he is doing for us and he is doing everything possible for us.
#1 All Forums Contributor
- Investor
- Virginia
I'm wondering if there are any disadvantages to doing this to doing this. I am owed $315,000 on the remaining balance balance but the property is worth $900,000.
2. What cost will I incur by setting the upset price high enough it's not worth another person to bid?
You will have to pay (cash) the delta from your bid price to what you are owed. So lets say you bid $900,000 - you will have a "Credit bid" of what you are owed, which is $315,000, so you will need to cut a check for $585,000.
3.Will I owe any difference by setting the upset price so high? YES
4. Will I owe any money to the the sheriff's department to get the property back? SEE ABOVE
5. How will the lien play into the upset price or the fees after if I am able to recover the property back if it does not sell? IF IT IS SOLD FOR LESS THAN $315,000 THEN THE LIEN IS WIPED. IF IT SELLS FOR MORE THE LIEN GETS PAID.
An auction is just a forced sale. Typically at auction the lender bids full payoff if there is equity in the property then you will get paid of. Anything above what you are owed then you have to pay out of pocket.
6. What is the smartest and easiest way to make sure I get my property back?
Ok thank you. So is upset bid same as upset price? Or are they different types of transactions. I am not trying to make a upset bid....I am trying to set the upset price because I'm the lender.
#1 All Forums Contributor
- Investor
- Virginia
@Darren Glahn
What state is this in?
Ok thank you. So is upset bid same as upset price? Or are they different types of transactions. I am not trying to make a upset bid....I am trying to set the upset price because I'm the lender.
Quote from @Darren Glahn:
Oregon
https://oregon.public.law/stat...
"The trustee shall apply the proceeds of the trustee’s sale as follows:
(1)
To the expenses of the sale, including the compensation of the trustee, and a reasonable charge by the attorney.
(2)
To the obligation secured by the trust deed.
(3)
To all persons having recorded liens subsequent to the interest of the trustee in the trust deed as their interests may appear in the order of their priority.
(4)
The surplus, if any, to the grantor of the trust deed or to the successor in interest of the grantor entitled to such surplus. [Formerly 86.765]
"
#2 Contractors Contributor
- Severna Park, MD
Why not just buy it from the person you hold the note on ?
I can not buy directly from the person that On the note Because there is a $50000 construction lean that has gone to lawsuit. We are applying for a summary of judgment which will allow a judge to decide if he is in default by carrying a lein with the property. At that point the judge will ask the sheriff to collect the property and it will go to auction. He owes 315000 in principle. I bid I have about $15000 in attorney fees and there will be sheriff fees. He also did not pay $2500 in property taxes last year so that will probably be owed as well. So now we are trying to figure out how we can best handle the sheriff's sale to get the property back. If I get the property back I could probably sell it for 8 or 900. What I don't 100% understand is what I have to do in order to get it back in the sale. What happens if I set the upset price at 500000 and nobody meets the bid? What happens if I set the upset bid at 500000 and it sells for 800000? Where does all the money go to?
#2 Contractors Contributor
- Severna Park, MD
I dont believe you get to set the upset price . IF it goes to auction , the first lien holder ( you ) would be there to protect their position and bid that amount , the second would get their money if the bid goes high enough , taxes get paid some where in there . ANY amount over that goes to the current owner after all fees that have been tacked on .
I doubt you have any chance of getting the property . Look at those numbers , the current owner could just sell at a discount and still walk away with a couple hundred grand .
I would contact the owner and try to make a deal BEFORE it goes to auction . The contractor just wants their money . If he owes you 315 and the contractor 50 , thats 365K . Offer him $500K and sell it for $ 800K . Everybody is happy
Because we are still on the title and hold the trustee is why we get to set the upset price. The current owner of the land that is in default bond is in default b
Because we did owner will carry we are the lender. Does that part make sense or am I wrong?