house is for sale and going to foreclosure auction..

[John Gray]

please help, i'm not sure how to go about this

1. what is the best tactic in acquiring a property that is for sale but is going to a foreclosure auction?

2. if there is an accepted offer will the auction be postponed?

3. would it be better to make my offer and also go to the auction?

thank you for any insight

[Kim Knox]

@John Gray

What is the market value?  Is it owner occupied?  Do you know the total the Seller owes (mortgage activity is public record).

I would confirm you are bidding on a first mortgage, then purchase at auction with cash.  It is beyond me why they are not trying to short sale, it actually makes me suspicious.  I would pay for a preliminary title report to ensure the lien position and to make sure no other liens or judgments populate.   

It is suspicious for a few reasons. Most importantly to the Seller, a tax consequence will be based on the ultimate sales price (in my area).    It also makes me wonder if are getting bad advice.  

In Oregon, an owner has a 6 month right of redemption period.  I would offer to buy the owners right of redemption period, with a formal agreement indicating they will be vacating the house in 30 days. 

There is nothing to stop you from making an offer prior to it going to auction, but you might be alerting them to a foreclosure that they are unaware of.   In my experience, they may delay the auction if it is  at least 7-10 days prior to the auction date.  If you decide to make an offer prior to it going to auction, get your own agent who has short sale experience to help you investigate the status without alerting the listing agent to the foreclosure.   

The reason I recommend your own agent is for two reasons.  Any Agent with short sale experience, would be trying to short sale rather than letting a home get foreclosed on, so I am thinking the existing listing agent lacks short sale experience.  This makes it important that your Agent needs to have short sale experience.  The 2nd reason it is important to select a short sale experienced Agent is that the Seller can accept your offer just to extend their free stay at their home, without regard to your time and efforts.  Meaning, they could know they are not in position to short sale and just work with you to delay the process.