Hard money lender with Auction.com process?
Apologize in advance if this has been outlined before, but I read on different posts you can use hard money loans through Auction.com. How does that process work with Auction.com using a hard money lender? On Auction.com properties, it reads that it requires 100% funds due at a time of sale in cashier’s check, but time of sale is a little unclear for me. What does the transaction process look like on Auction.com if you win the bid? Do you need to provide proof of funds at the bid or are the actual funds due at the time you win bid? And if a property is owner occupied, how can you secure a loan with a hard money lender not being able to view the home to estimate repairs? All a little new to me!
The key to this is finding a HML that doesn't require access to the property for an appraisal. You'll pay a higher rate and may need to have more of your own money in the deal in case of unexpected repairs.
A better option if you can swing it is to purchase with your own funds, gain access, then refi into a loan. Or just use private money.
It has been a year or 2 since I last purchased on Auction.com so things could have changed. However, it sounds like you are confused about the different types of auctions that exist on Auction.com. In my experience, you can absolutely use hard money in bank owned reo auctions...you still don't generally get access and thus need a lender who does need an appraisal in this scenario. The auctions, although online now, are live foreclosure auctions, i.e. the auction style sale which is the culmination of the foreclosure process. In this later scenario, you need all cash, just the same as if you were doing this old school style at the courthouse steps. That is unless you have a JV or other equity partner who is putting up the funds immediately with no lien, title insurance, etc.
For an auction.com purchase in Washington you have 2 options.
Attend in person, bid, if you win you have to pay right then via a cashiers check. You will need to have the full amount you’re willing to pay. Any additional will be refunded a few weeks after the auction.
Or you could wire all the funds to there escrow acct, bid and pay if you win, then request the remainder of funds to be refunded.
Thank you all so much. Appreciate it!
Hi Angelica,
Just adding my own 2 cents worth here from a deal I did not too long ago:
I bought a prop off Auction.com about 2 years ago. It was on the MLS so I had access to it. After winning the bid I had to provide 5% of the price as earnest money within 1 day of the seller countersigning the contract. Contract closing date was 45 days hence, during which time I got the pre-arranged funding from a HML.
Did not have to show POF as it was online auction. Home was vacant.
Best,
Dave