Hello BP Community!
I am looking to purchase a home through auction for my family and I and the details are as follows:
- Wells holds the lien and there are no junior or other outstanding liens.
- It was established in 2011 at 175k and the property owner stopped paying over the summer so I think it's in the 161k range for what's left on the mortgage.
- In talking to Wells they said that they were not listing the property for auction but the owner was... yet Auction.com lists this as a foreclosure property.
My father would partner with me on the cash for this deal until I can grab my traditional financing but he is worried about being on the hook for more than we expect.
If I have checked with my recorder of deeds for any extra liens or overdue taxes, sewer bills, etc, can I be on the hook for anything more than my bid price if I win? My father is nervous that if we win the bid at say 150k, the bank may come after us for the last 11k on the loan plus any legal fees and penalties. Could this happen?
My thinking is that the bank will have someone there and won't let it go for less than their break-even point on this property. Can anyone clear up this question for us?
And please let me know what experience/credentials you have as this would be important to my father.
Thanks to all!
Just to be clear...the Owner/mortgagor has listed his property on auction.com? Do the auction terms say you are getting clear title? Warranty deed to be issued? If not, sounds like the owner is just fishing/hoping for a sucker to over pay. Has/is the property been listed for sale as a short sale? Sometimes, the lender makes a seller in a short sale run a short sale thru auction.com, to "verify value", but not usually Wells. Short answer....the lender is owed a full pay off unless they are doing a short sale. Otherwise the bank likely knows nothing about this and no private auction will eliminate them.
The bank wants its money,all of it.If it was a bank foreclosure sale it would be handled by the court and usually done at a courthouse or other designated area.The bank will always bid first for the full amount of what is owed and you have to beat it or let them take it back and negotiate directly with the bank for a lower price.If that's not exactly what's happening here I wouldn't touch it with a ten foot pole.Go back to the bank and get more information and verify the bank is or is not foreclosing on the property at this time.
It sounds to me like auction.com is listing it as a foreclosure because it has actually begun the foreclosure process. If you dismiss what the bank said about the loan status.
@Wayne Brooks , when the banks asks the seller to put in on auction.com to get a feel for value does the house list as though it is in foreclosure?
Robert you may want to check with the sheriff office to see if they have the house on any of their up and coming sales.
Account Closed to answer your bolded question first, yes, you can be on the hook for more - federal, state, and local. As I suspect you know, in St Louis City MSD has the law written so that the sewer bill stays with the property. This is where research is important - title companies can do searches to see what is on the property, and based on this may be willing to issue title insurance. Personally, I wouldn't purchase my residence without title insurance - my parents nearly lost their home when I was a baby because of title issues that didn't become an issue until years after they'd purchased.
With regards to auction.com I would verify who has listed the property and where it is in the foreclosure process. Remember, the current owner can pay up until the time of the auction (happens all the time for sheriff sales in St Louis), and in Missouri they do technically have right of redemption.
This is a decent pdf that walks through the process - it was a supplement to a presentation so not complete but cites the relevant statutes and may help you figure out where this house actually is in the foreclosure process
With regards to credentials, I'm an investor as well as an investor-friendly agent, so I make an effort to educate myself about auctions and the foreclosure process. It is by no means my area of specialty, but I have spent hours calling around and investigating title issues on behalf of a client.
Originally posted by @Account Closed :
It sounds to me like auction.com is listing it as a foreclosure because it has actually begun the foreclosure process.
@Wayne Brooks, when the banks asks the seller to put in on auction.com to get a feel for value does the house list as though it is in foreclosure?
HUH? Bank ask seller to ... hahaha, rof. If the seller is going under, they have no motivation to cooperate. The bank files foreclosure and all these websites scrape up the info from public records, or if desperate, might buy a list directly from the bank. I bough these lists from a title company.
I seriously doubt that banks have any relationship with ANY websites posting foreclosures . . . they just don't need to.
@Account Closed The problem here is, we don't know who lists or why the property is listed on auction.com. I suspect there is some misunderstanding on that issue. Auction .com generally has 4 different scenarios for listed properties on their site.
2) Trustee sale where auction.com is actually acting as the trustee
3) Other foreclosure auctions where they are not involved at all....I've seen these more frequently in the last year here where all our foreclosure auctions are judicial, and done online thru the county clerk of court sites, using a third party platform (not auction.com). I don't know if these third parties pay auction.com a fee to publicize them, or they just do it to drive extra traffic to their website, even though they aren't involved in the auction process.
4) Some servicers such as Nationstar will require some short sale properties to be placed on auction.com after they receive a contract, for "price verification" purposes. The high bidder in these cases is simply put "into contract" on a short sale with all the baggage that entails.
Very rarely will an individual owner place their property on auction.com, this my doubts that's what's going on here.
Very helpful. Thanks.
Auction.com, Homesearch.com, Marshallandhudson.com are all listing trustee/foreclosure sales on their websites now. When you type in an address, it will pop up on Google pointing to their website, I'm assuming in an effort to drive traffic to their site and detract from Zillow/Trulia. Some even provide title info, not sure why they go to this length though?
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