Buying auction properties in Wake County, NC
Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
I have been researching the process of purchasing foreclosure properties at auction in Wake County, NC. I understand there is an initial auction "at the courthouse steps" (announced in the local paper) in which the winner must have funds available immediately. As I understand it, the amount of funds available is 10% of the winning bid price. Then a 10-day upset bid process starts where the winning bid can be overtaken by a higher bid and each time a valid upset bid is placed the 10-day clock starts again.
But I still have a bunch of questions I can not find the answer to online, that I was hoping someone in the BP universe might be able to guide me through. Things like
- How to determine what encumbrances remain with the property that a winning bidder will have to pay.
- Why even attend the initial auction if there is a 10-day upset bid process and how does one determine what properties are in that process
- How legit are all those auction sites like auction.com. They say they are auctioning foreclosure properties but the requirement is for auctions to occur at court.
- Is it permitted to contact the trustee of the property and negotiate a purchase prior to auction?
You get the idea, someone that has been-there-done-that who is willing to share the details.
Many thanks in advance.
I don't know where some people get their information. I suggest you take a class from Wake Tech or Campbell University that covers foreclosures. The classes (although many years ago) I've taken were provided by attorneys in the trade, specializing in foreclosures. The process for foreclosures under a Deed of Trust (D-T) Power of Sale (PoS) are covered in the NC General Statutes, specifically NCGS Chapter 45 Mortgages and Deeds of Trust
For property tax sales, which are a little different (about 5 pages different) than the D-T power of sale process, see Chapter 105, specifically 105-374 Foreclosure of tax lien by action in nature of action to foreclose a mortgage.
For sales under the North Carolina Condominium Act, the rules are different. See, for instance, 47C-3-116 Lien for sums due the association; enforcement. You will get a Commissioner's Deed, not a Trustee's Deed, at least in every case I am aware of.
The North Carolina Planned Community Act may be applicable depending on your association's recorded declaration.
The above sale types occur at the courthouse steps. So, different (but similar) rules depending on context. Keep in mind this business is all about details, so referencing or following the wrong statute(s) can be dangerous. Missing liens in discovery can be costly. I know from experience.
Answers to questions
#1 unless you are skilled (or educated) in title work, get a title search done from a paralegal or attorney. Liens are resolved by lien priority, and different type of sales have different impact on liens (an example: liens by associations under NCGS 47C are unenforceable after a first D-T foreclosure per NCGS 47C-3-116(j). Another example: Unrecorded liens by municipalities attach, so do your DD.)
#2 why pay 5% more than necessary? The upset bid process is in NCGS 45-21.27
#3 I have only bought REO property online from auction.com. My purchases were legit as were the sales. They (auction.com specifically) seem to combines marketing for trustee sales and REOs. Stuart has a good response.
#4 the trustee generally won't talk to you. They will talk to your attorney (if you have a good one) so talk to your attorney first about your plan, then see if there is an angle that you can pursue. Unlikely this path will yield much since the attorney, acting in the role of substitute trustee, gets paid by following the legal process of power of sale. This path was hard after the great recession when foreclosures were rampant, so don't hold your breath.
For facts about deposits at courthouse sales, etc., it's best to read the security instrument or the NCGS requirements, like at
NCGC 45-21.10 Requirement of cash deposit at sale before you grab a fist full of $100 bills and run to the courthouse with your 5%.
A large percentage of security instruments will be from a GSE, with Fannie Mae forms being very common. So learn D-T PoS from FNMA Form 3034 if in NC.
There are other posts on BP Nation about NC foreclosures... just need to search.
I bought a lot from the city auction in durham (same process). To 10 day upset period really drags things out, it ended up taking me four months to win the auction. If you just do huge upset bids, it will expedite it though. Most of the properties end up selling what they do for on mls. I ended up paying mls price on mine, but it was in an area where i don't see a lot of vacant lots, so i was prepared to pay that price.
In theory all the liens will be removed upon the acquisition of the property. They don't detect irs liens though, but 99% of the liens are detected through their closing attorney. The closing attorney is the same you would use when you acquire a lot, but the cost is inclusive. I don't think they give you title insurance though.
My response, as it applies in NC
- Why even attend the initial auction if there is a 10-day upset bid process and how does one determine what properties are in that process?
The court posts foreclosure notices and you can research the property and do a drive by based on that before the auction. Attend a few auctions and get to know the consistent participants, if this is going to be your strategy. This is a networking opportunity that might help more than the auction. You may gain knowledge of the property in conversation and see how motivated your competitors are. You can check with the Clerk of Courts office for the upset bid status. You place your bid through that office. Normally, there are people who specialize in this niche at every auction, watch listen and learn!.
- How legit are all those auction sites like auction.com. They say they are auctioning foreclosure properties but the requirement is for auctions to occur at court?
Different foreclosure auction. These are auctioned by the bank AFTER the court foreclosure auction. When the lender is the winning bidder, they have a resale market online before local brokers attempt a listed sale. Sometimes properties return after a failed listing period. These are safer because the title has basically been searched and vetted for liens.
- Is it permitted to contact the trustee of the property and negotiate a purchase prior to auction? The trustee is not going to be able to help you according to their fiduciary duty to the seller to bring the highest, most competitive sale price.
The courthouse steps can present disadvantages over MLS, or online auctions in some observable ways.Court auctions are subject to overbidding in the current Wake County market which is under supplied on lower priced inventory. Assumption of title is subject to undiscovered liens in some cases - you will need to pay for your own title search prior to going to the court auction to avoid this in North Carolina. Liens would have to be paid by you before title is granted at closing. Inspection of structures is very limited. Properties tend to be neglected and frequently have major flaws and buyers have very limited due diligence access. Lastly, this is a specialized area of real estate that requires expertise and an excellent command of the governing laws and processes. As real estate niches go, this is not the kiddy pool.
Larry, John's response is pretty much what I would say. The only clarification I would make to that is that there are a lot of vendors (Auction.com is the biggest and most recognized) who market properties that are either going to sell in the courthouse foreclosure process or that have already sold in the same. The former are still overseen by the trustees, the only difference is in who cries the sale (e.g. Shapiro & Ingle vs Auction.com employees). The latter are traditional REO properties that Auction.com attempts to re-market prior to them hitting the banks books and sell via an online auction with proxies and the like.
Thanks for all the great responses, especially @JohnDean for his clear, and very helpful, answers plus (point-taken) cautionary words. Once the world opens up again I will definitely attend some court house steps auction to get the feel of how it works and to meet the players.
I don't know where some people get their information. I suggest you take a class from Wake Tech or Campbell University that covers foreclosures. The classes (although many years ago) I've taken were provided by attorneys in the trade, specializing in foreclosures. The process for foreclosures under a Deed of Trust (D-T) Power of Sale (PoS) are covered in the NC General Statutes, specifically NCGS Chapter 45 Mortgages and Deeds of Trust
For property tax sales, which are a little different (about 5 pages different) than the D-T power of sale process, see Chapter 105, specifically 105-374 Foreclosure of tax lien by action in nature of action to foreclose a mortgage.
For sales under the North Carolina Condominium Act, the rules are different. See, for instance, 47C-3-116 Lien for sums due the association; enforcement. You will get a Commissioner's Deed, not a Trustee's Deed, at least in every case I am aware of.
The North Carolina Planned Community Act may be applicable depending on your association's recorded declaration.
The above sale types occur at the courthouse steps. So, different (but similar) rules depending on context. Keep in mind this business is all about details, so referencing or following the wrong statute(s) can be dangerous. Missing liens in discovery can be costly. I know from experience.
Answers to questions
#1 unless you are skilled (or educated) in title work, get a title search done from a paralegal or attorney. Liens are resolved by lien priority, and different type of sales have different impact on liens (an example: liens by associations under NCGS 47C are unenforceable after a first D-T foreclosure per NCGS 47C-3-116(j). Another example: Unrecorded liens by municipalities attach, so do your DD.)
#2 why pay 5% more than necessary? The upset bid process is in NCGS 45-21.27
#3 I have only bought REO property online from auction.com. My purchases were legit as were the sales. They (auction.com specifically) seem to combines marketing for trustee sales and REOs. Stuart has a good response.
#4 the trustee generally won't talk to you. They will talk to your attorney (if you have a good one) so talk to your attorney first about your plan, then see if there is an angle that you can pursue. Unlikely this path will yield much since the attorney, acting in the role of substitute trustee, gets paid by following the legal process of power of sale. This path was hard after the great recession when foreclosures were rampant, so don't hold your breath.
For facts about deposits at courthouse sales, etc., it's best to read the security instrument or the NCGS requirements, like at
NCGC 45-21.10 Requirement of cash deposit at sale before you grab a fist full of $100 bills and run to the courthouse with your 5%.
A large percentage of security instruments will be from a GSE, with Fannie Mae forms being very common. So learn D-T PoS from FNMA Form 3034 if in NC.
There are other posts on BP Nation about NC foreclosures... just need to search.
@Chris Martin
Thank you @Chris Martin. Lots of great information and I appreciate the links and the time it took to put facts together. Looks like I have my reading cut out for me.
Late reply but this thread still ranks well and these are great questions for anyone looking at Wake County auctions.
To answer a few directly:
Encumbrances — pull the Register of Deeds before you bid. The big one people miss: federal tax liens survive NC foreclosure sales unless proper 25-day notice was given pre-auction. If it wasn't, the IRS gets a 120-day right of redemption after the sale. That alone can kill a deal if you're not prepared for it.
Why attend the initial auction — because that's where you set the floor. The 10-day upset bid window opens after the commissioner files the sale report. Anyone can raise your bid by 5% or $750 minimum, and each new bid resets the clock. In Wake County right now, properties with decent ARV are getting actively contested through multiple upset rounds. Budget 30-45 days from auction to confirmed ownership.
Competition has changed a lot since this was posted. NC foreclosure auctions were up over 50% YoY in Q4 2025. Wake is one of the counties driving that surge — a typical sale now draws 6-12 bidders. Secondary counties like Johnston, Anson, and Scotland have growing inventory with far thinner turnout.
All 100 NC counties run their own schedules with no state portal. I built northcarolinataxdeeds.com to aggregate all of them in one place — upcoming auctions, active upset bid windows, sale dates. 7-day free trial if you want to see what's coming up in Wake and Johnston.
What property types are you targeting?