probate auction

8 Replies

I see a few houses that are for sale at probate auction.. what do you guys think of these deals.. what happen if i win the auction and change my mind? can i still decide or is it too late? what are the penalties?

Where are you finding these properties? I bought a probate through the MLS and made the offer through our Realtor, and then we had to go to court. The judge put it out to the courtroom, asking if anyone else wanted to make a bid. No one spoke up, and we got the house, and then had to get a conventional loan to close the deal. It is possible to make a probate deal by dealing with the personal representative directly, and making your offer to that person, who is the decision maker. In our case, there we no heirs, but often there are, and they want to sell the house. Look into probate law for your state and county, as the process differs from place to place.

Hi Susan,

What is a probate auction? How is it possible? I think you are mistaken. Can you give me the info to where probate auctions are held? I know the judge can order it sold, but it wouldn't be an auction. You may be right, but I've never heard of a probate auction. Can you share the link?

Thank you, Brian

@Susan Capeta   @Brian Byhower  I don't know exactly what is happening in this situation, but an estate can simply decide to sell a property owned by the estate via auction.  

Read the term of the auction. Often auctions say "property will be resold at the risk and expense of the defaulting purchaser"  This means they can come after you for the new auction price and what you bid. Or it may say that you simply forfeit our deposit if you default. 

The bottom line is you should not be bidding at auctions if you are going to have second thoughts or do not have the cash to buy it.

I would assume it needs a complete rehab and bid accordingly. 

I don't know that market well enough to venture a guess as to the actual $ figure. If you are not prepared to do a full gut rehab you probably shouldn't be bidding.

Originally posted by @Account Closed :

Hi Susan,

What is a probate auction? How is it possible? I think you are mistaken. Can you give me the info to where probate auctions are held? I know the judge can order it sold, but it wouldn't be an auction. You may be right, but I've never heard of a probate auction. Can you share the link?

Thank you, Brian

 I could not tell if you were just kidding or serious.

As to the OP's query, in CA probate auctions may be conducted for both private sales and public administrator. Currently, the LA county PA auction brokerage is under contract to Kennedy Wilson. In prior years it's been conducted by Flans and Weiner, Gamson and Flans and Marsh Dozar (Richard Kottle). That accounts for at least the last 25 years that I've been in the game.

Winning bidders post 10% certified funds and must close with normal escrow period of 30 days or as contracted, however limited power sales require court confirmation and are subject to an overbid formula. So, you could win the first round but lose on the second round, and merely get you deposit money back.

Private auctions are conducted, too. Usually for unique, high dollar properties or grouped with other property sales in a given auction event. 

If you gave a pile of money that you need to keep busy, an auction might be the way for you to acquire 100% (or occasionally a fractional interest) in real estate with benefit of escrow and title insurance, unlike foreclosure auctions and tax sales.

Anyone been successful at auctions? and is there any strategices to winning at these auction.. i went to one of the house and 40 people showed up.. there is heavy compeittion because the house is worth 400k and selling for 200k

I see a few houses that are for sale at probate auction.. what do you guys think of these deals.. what happen if i win the auction and change my mind? can i still decide or is it too late? what are the penalties?

If you are the successful bidder at an auction, you are required to settle. You would need to read your contract, it will tell you what the penalties are. In some cases the property will be auctioned again, you could be liable for the difference if it happens to sell for less. 

Example, if your bid was a $100,000 and you backed out and the property was resold and the accepted bid was $50,000, you could be liable for $50,000.

Make sure you know what you are doing before bidding. There are times when bidders get "auction fever", they bid beyond what they want to bid.

Charles