I've been looking at mls for houses to flip, but in los angeles there isn't a lot of deals. I want to go directly to the court house for auctions. Anyone know when the next one is and how the process works?
Can I get good deals still at these auction and are the auctions not on the MLS?
This has been a solid method of finding properties for many years and they are not typically a part of the MLS system as they are not technically 'Listed' for sale. In most areas the successful bidder will be required to fund the purchase entirely within 24 hours of the close of auction. This prevents using financing to acquire these properties because clear title can not be conveyed for a week or two depending on the county the property sits in.
The trustee sales auctions are not necessarily in MLS.
You may want to check auction.com or rsvpforeclosures.com, there are many other sites.
A good place to find information on properties in general is propertyradar.com.
Buying properties at the "steps" is an art, and you must be knowledgeable and careful. You would not want to buy a junior lien when you think you are buying a property free and clear.
Im sure there is information on the process here in BP, so do your research. Also know that every state has their own specific regulations and processes.
Each state has its own regulations regarding "courthouse" auctions. Being from Colorado I cannot speak to California specific rules. However, from what I understand many of the same components are very similar.
The information you are looking for is public knowledge. Take a trip to the county court house and ask around. You should find a list of properties scheduled for auction. There are services that pull this data that you can pay a fee for. As @Juan Carlos Quiroz Zolezzi points out property radar is one of them.
I pull data directly from my county web site for free sitting in my pajamas.
The courthouse properties for auction are technically all pre-foreclosure; if no one bids and buys, then the property deeds back over to the lender who is foreclosing. The properties then become REO.
Court house auctions are a cash game - you will need a cashiers check or green backs to win a bid at the court house auction. Apparently, some states allow for funds to be delivered within 72hrs or some other time period. Not sure if California allows this.
The Banks set the opening bid - which is typically very close to what the lender is owed. often banks will take a deficiency to the full amount; in other words the bank will take a loss. Don't expect bids to open at zero.
Can you find deals at the auction? yes and no. most of what I see are not deals. Maybe 4 out of 10 have some equity in them but very little. 1 in 10 has a decent margin. All will get bid up fiercely.
Auctions are a spectator sport, spend sometime watching and learning.
Beginners who think they understand the auction process will lose in a big way when they don't know how to do their due diligence.
You have to ensure you are buying the first position lien. Junior seconds and thirds will go to auction---if you buy a junior lien you will not have the deed to the property, you will simply have the rights to a non performing loan. ouch! It happens.
All this might sound a little negative but I love to buy at auction I enjoy the process - Once a week,In less than 20hrs, I will run through a list of 20 properties narrow it down to 4 or 5 do drive buys, look in windows, ask a lot of questions, pull reports to check for encumbrances, run my numbers and then head to the auction the next morning and bid on my favorites. To be sure, I lose more than I win because I will never over bid. If I want to pay retail I will go to the MLS.
@Marcello D. how do I know about a junior lien before hand?
I'm new to investing as well and never bought at an auction but as Susan mentioned there are no deals on the MLS.
Also, are these court house auctions the same as sites like auction.com, HM and other auction houses?
Second question first.
Courthouse or Trustee auctions are not the same as Auction.com, Hubzu etc. The trustee/ courthouse process is a legal process given to the lender who is foreclosing ( I'm not a lawyer don't take this as legal advice). Its really a pre-foreclosure process.
If the borrower defaults, the court house process is one of the methods lenders can use to get paid what they are owed or take possession of the property - in other words foreclose.
Some properties will not sell at the courthouse auction because they are simply over priced, the banks will then take possession and then the bank will in - some - cases try to sell the property via one of the commercial companies, Hubzu etc .
More often they will sell them via a real estate brokerage specializing in foreclosures.
As for your question regarding liens: Here in Colorado I go through my local title company - it takes about three hours for me to get an Owners and Encumbrance ( O&E ) report which costs me $5. However, I ordered 2 reports today in another county from a different title company, these reports cost me $12 each and I haven't seen them yet!
Not sure of the best way to pull an O&E where you are. Try the Title company first. A real estate attorney can also do it. I also understand that there are third party companies that will do it. Sticking point is going to be the fee...If an attorney has to do it don't expect to pay less than $100. I understand some folks get reports for free through a title company they have a strong relationship with.
hope this helps.
Call any Title Company and get on their list for NOD / TS
The email comes straight to you.
@J Beard What is NOD / TS ? Thanks!
You said that some of the property for sale is overpriced at the auction. What do you use as a source for valuation of these properties if you are doing due diligence before the auction?
NOD: Notice of Default - - typically there will be three which leads up to
TS: Trustee Sale - - notice when and where
I search my county assessors site for properties sold to get estimates and I always use my real estate agent prior to bidding in order to determine my max purchase price.
Thanks Marcello ! Have you established a metric that relates assessed value to actual value. So your market price is from comps?
I use comps and my knowledge of the Spring's market in order to determine fair market value.
Thanks Marcello. Do you use different RE agents for different sections of the city, or rely on one good one?
I called the city of Los Angeles and they said there is nothing for auction in LA county anymore. They said they had their last one in October and they only had it a few times a year. They said they have another one next year but they dont know when yet and probably be in Septebmer 2016 or October 2016.
Does this seem right? they only do auction once a yearr? I'm just trying to buy a house at a good deal.. how come i have to wait an entire year for another auction?
There are many city in LA county, is the auction city base or county base? Is there an auction at every city or every county.. should i call every city and ask them if they have another auction coming up?
Live trustee auctions for the LA County are posted at the Norwalk Superior Court House. They have been happening there, out in the courtyard, for many years. However they are now moving these live auctions to Pomona.
One of the conditions to be able to register to bid for these auctions is that you MUST bring a CASHIER CHECK for the amount of the starting bid. You will NOT be able to just furnish a fake proof of funds and later look for hard money, nor assign the deal to anyone else. You must bring the cashier check and present it to the auctioneer in order to register so, you either have to have the cash in the bank or partner with someone who has, and will give you that cashier check.
Check out Auction.com they have a live auction almost every other week. Its at the doubletree hotel in norwalk and its always on a thursday. I was there just yesterday and there were 25 properties up for auction but there were about 150 people there. Its still fierce competition but about half of the properties were bought right and would make great flip projects.
At the begining of the auction, the auctioneer states this is the same courthouse steps auction just brought indoors, which if true would explain why the actual courthouse step auctions are so few and far between.
Just saw your reply; to answer your question: I use a couple of different agents however I have my favorites.
Susan, most Foreclosures in CA are non judicial, which means the county/city court system has nothing to do with them.