How do auctions work in NC?

2 Replies

I’ve done research on foreclosures auctions in my county and still confused on how they work. I’m specifically looking for Guilford County/Triad/Triangle areas. My main questions are: 1. Can I do conventional financing? It’s seems that the answer is no but are there exceptions. 2. What about hard money? Seems to be the same as above. 3. So I win a bid, and I put down 5% earnest money. What next? Do I have time to gather funding or is it required at that time? Any help would he great, you don’t have to be an investor in those areas. Just thought each county has its own guidelines.

It depends. Generally speaking, I would be very surprised if you could ever get conventional financing on a N.C. foreclosure. Most conventional financing has too many pre requisites, which a you’d be unable to meet on a foreclosure property. You likely wouldn’t be able to get a legitimate appraisal, nor access to the property to assess condition. Banks would want to pull their hair out and likely avoid financing. Plus, the time it takes to get approved for conventional is quite timely and usually exceeds the window needed to close.

In NC there is an upset bid period of 10 days. So even if you submit a “winning bid” someone can upset your bid at the courthouse for up to 10 days. For this reason, it’s very difficult for foreclosures to slip through the cracks in N.C. if it’s a property worth having, someone likely will upset your bid without you knowing. To fully maximize foreclosures in N.C., you have to monitor the court house bids like a hawk to make sure your bid lasts the whole 10 days. If someone outbids you, the 10’days resets. 

If you do submit a bid and it goes 10’days without being contested, then you officially win the bid. Typically, you have 30 days from then to close the deal. During this time you can get financing in order. However, a lot of this depends on the foreclosure attorney who is performing the sale. Some attorneys are much stingier with this time frame. There is no rule on what type of financing you can get, but the nature of foreclosures requires it to be something that’s flexible, fast moving and has little to no contingencies. For that reason, cash is best, Or Private money. Hard money can be a good option, but even some of larger institutional hard money players likely won’t finance them.

Hope that helps

@David Seroy you are the real MVP. You answered everything I asked perfectly. I still need to do a little research but I feel comfortable now that I know how it generally works. However upset bids seems like a real bummer.

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