Auction.com Trustee Sale: First Timer Horror Story-List

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Auction.com Trustee Sale: First Timer Horror Story-List

Helen Zhang
Austin, TX · Member since 2016 · 160 posts · 39 votes

I am in the process of purchasing my first trustee sale. (This isn't my first property, but it is my first trustee sale). The property is located in Dallas, Texas. I have won the auction, signed the contract, and wired deposit. I'm prepared for the following horror stories on the list:

1. Bank denies my offer even though I am the winner.

Less likely but possible, I read trustee minimum acceptance number is exactly what I have offered.

2. Getting a quitclaim instead of a warranty deed.

Less likely but possible, I have performed preliminary title report and obtained commitment for title insurance.

3. Bank denies me for random reasons and I am unable to get back my deposit.

4. Unable to complete transaction on time.

Less likely since I am doing cash transaction.

5. Cash for keys fails

6. Eviction Fails

Is this even possible in Texas? 

7. Occupying tenants destroys house completely.

8. House burns down before I take it over

Knock on wood but what if this happens, then what? 

9. Contractors are bad

Yes I need recommendations for contractors in Dallas, please!

10. Property Managers are bad

Yes I need recommendations for property manager in Dallas.

What other horror stories that I should prepare for that I should add onto the preparation list from an auction.com trustee sale? 

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y

@Helen Zhang There is no contract in a foreclosure auction....this is the last step in the foreclosure process. REO sales are most often done by Special Warranty Deed, or by quit claim deeds. Foreclosure auctions result in some type of sheriff's deed, certificate of title, etc.

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  • Daniel Ahern
    Investor · Bali, Indonesia · Member since 2016 · 45 posts · 16 votes
    10y
    I'm preparing to make my first purchase in Dallas in the next 30 days. Very interested to hear how it goes for you! I'm just beginning to research & vet PMs. I'll be flying out there soon to do meet & greets. I'll be sure to pass along any solid references...
    0Reply
  • Todd Plambeck
    Agent/Investor · Murphy, TX · Member since 2013 · 542 posts · 304 votes
    10y

    Where is the property located?  Did you bid on the auction in person or have a proxy?  Evictions are generally painless in Texas.  I have seen people contest whether the bank who sold the property had the right too because the mortgage got sold and re-sold repeatedly.  Did you have someone do the title research for liens or did you do it yourself? 

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    @Helen Zhang Perhaps you need to get your terminology correct....what you are describing is an auction of an REO property, not a "trustee, foreclosure auction". Auction.com does both.

    1Reply
  • Helen Zhang
    OP
    Austin, TX · Member since 2016 · 160 posts · 39 votes
    10y

    @Daniel Ahern I'm so glad to hear that. Please do keep me updated with good PMs. 

    @Todd Plambeck I had a title company to do title research for me with commitment for title insurance.

    @Wayne Brooks How are you able to tell whether it is a REO property or Trustee property? My way to identify is to read the contract. A REO property would grant warrantee deed as always, and a trustee property will grant either warrantee deed, special warrantee deed, or quitclaim deed. Please educate me.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    @Helen Zhang There is no contract in a foreclosure auction....this is the last step in the foreclosure process. REO sales are most often done by Special Warranty Deed, or by quit claim deeds. Foreclosure auctions result in some type of sheriff's deed, certificate of title, etc.

    2Reply
  • Mark H.
    Investor · Grapevine, TX · Member since 2014 · 88 posts · 75 votes
    10y

    @Helen Zhang : I recently purchased a foreclosed property in Texas from auction.com by the courthouse. Three weeks later I received a Substitute Trustee's Deed.

    I offer $1000 cash for keys, and deduct from it the cost of what I consider intentional damage. It worked for me, the occupant had something to lose and thus left without causing damage.

    I have seen another investor buy a property and it turned out 10 minutes earlier the owner filed for bankruptcy. The investor got the money back almost a month later.

    The first place I lookup property managers is Narpm.org

    Good luck!

    0Reply
  • Helen Zhang
    OP
    Austin, TX · Member since 2016 · 160 posts · 39 votes
    10y

    Hi @Mark H.

    Thanks for the feedback. Surprisingly, the property I'm purchasing is actually vacant!

    I paid someone on craigslist 30 dollars and asked him to drive by take some photos for me. And he took a picture of the door post mentioned that it was vacant. Although this doesn't mean there is no intentional damage before the previous tenants left, at least there will be no hassle for cash and keys. I'm slightly happier. 

    In the case when the owner filed bankruptcy, what does it mean for your investor friend?

    I have confirmed with auction.com that the property is owned by Wells Fargo bank. 

    Thanks for your recommendations.

    Helen

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  • Rich Baer
    Real Estate Investment Attorney · Kingsville, MD · Member since 2016 · 643 posts · 408 votes
    10y

    That is their M.O. You hear nothing from them for the longest time and you think you haven been taken. Then you get notified that you need to settle this property within a day or 2. If you have done everything you have been asked to do you just need to wait. Trying to get them to respond is hopeless. I was just like you on the first deal. After several purchases from them you know how the game works. I believe they go into a silent period while they wait for final Bank approval and signatures. I hope that helps.

    1Reply
  • Helen Zhang
    OP
    Austin, TX · Member since 2016 · 160 posts · 39 votes
    10y

    @Rich Baer, thanks for the feedback. Auction.com is indeed in this "silent period". But this time they have notified me that they need 10 days from seller. 

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  • Mark H.
    Investor · Grapevine, TX · Member since 2014 · 88 posts · 75 votes
    10y

    @Helen Zhang : bankruptcy protection means a temporary delay of the foreclosure sale. It's a well known delay tactic owners in default use to prolong their free stay in the property. Every month I see some title reports with multiple bankruptcy filings every time the property was up for auction sale in the past. I call these "serial filers", they seem to have mastered it to the point some even live like that for multiple years!

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  • Helen Zhang
    OP
    Austin, TX · Member since 2016 · 160 posts · 39 votes
    10y

    @Mark H. Thanks for the lecture. I think you are likely to be correct that this property is an REO.

    @Daniel Ahern, did you end up finding a good contractor/PM?

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