Buying property at the foreclosure auction, or trustee sale, can be rewarding or disastrous. The difference between gain and pain comes down to knowing how it works and being prepared. As a veteran of hundreds of auctions I put together this video to give everyone an overview of the auction process. In less than ten minutes you can watch and learn the basics of how an auction works.
- How to find the actual location of the auction
- The three possible outcomes: postponement, cancellation, or sale
- Things to watch out for, such as
- Multiple auctioneers operating simultaneously
- How to make sure you bid on the correct property
- The implications of the As-Is sale
- Qualifying as a bidder
- A typical bidding scenario
- What happens when you win
ForeclosureRadar.com gives auction investors the freshest foreclosure information – including exclusive daily auction updates – and is the only foreclosure service with tools for making sense of it.Armed with this information, you have the best chance of a rewarding experience on the courthouse steps.
Great video, thanks for posting it!
Hi Sean.
I hear it’s possible to get hard money loans at the auctions if a buyer needs more cash. Is this true and how does it work? Do both parties take title to the property at that time?
Thanks.
yes it is, and those hard money lenders prepare before the auction for their clients to be at the sales, checks in hand. I will be sharing this in my next Strategy Session call on Feb 16, Wednesday, 6pm PDT. More here: http://www.foreclosures.com/webinars/private-study-session/
Great video, Sean! Interesting to see an auction consummated by a third party, instead of all going back to the bank!
p.s. can I link to this in my blog?
Hey, great presentation!
Great Video – Thanks – I always wanted to go and see an Auction and now feel like I get a sense of what it is like. Nice job.
Bob
Who do you write the cashier’s check to? youself and then endorse when get winning bid?
Correct.
what do you do with the receipt once you have the winning bid? take it to the title company?
The receipt is just for your records. The trustee should send you a Trustee’s Deed within a few days of the sale. Once you have the deed, then go to the county recorders office and have it recorded. No need to involve a title company, though they may be willing to record it for you. If you haven’t received it within 10 days, definitely contact the trustee and follow up. In CA the sale is considered completed as of 8am the day of sale, so long as the deed is recorded within 15 days. Recording it later likely won’t be a huge issue, but best to do it within that time frame if possible.
It looks like a huge mistake you could make is bidding and winning an auction that was for 2nd position when you thought it was for 1st position. What document would you need to have to make sure you have 1st position, and where on the document would you see that you clearly would be bidding for 1st position?
Determining position is more art than science. While recorded documents rarely state position, even if they do, it should not be relied upon. The safest thing to bid on at trustee sale is a purchase money first. Those are recorded the same day as the purchase was recorded, and should be the next document after the grant deed. For a lot more information on this check out this post in our forums: http://www.foreclosureradar.com/forum/buyers-and-investors/buying-auction/which-liens-are-not-wiped-out-trustee-sale
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In your video, under Terms of Sales, you mentioned that if the second mortgage foreclosed the home and if I buy it at the auction, I would still be responsible for paying off the first mortgage. I’m also responsible for paying any unpaid taxes.
Before I bid on a house at an auction, how do I know if the homeowner had more than one mortgage? At https://www.miamidade.realforeclose.com/index.cfm?zaction=AUCTION&Zmethod=PREVIEW&AUCTIONDATE=01/10/2012 , the auctions are online. If you look a house that is being auctioned on that website, there is a link for Case #. Clicking on that takes me to the County Recorder’s Official Record Search Results. Clicking on the Img icon shows the Final Judgment document. What should be written there to indicate that another mortgage and property taxes need to be paid by the new buyer from the auction?
Curt, it is unlikely that anything will directly state the loans position. Instead you have to look at the entire chain of title and see what loans were made before the one that is being foreclosed on, and then look to see if those have been reconveyed (paid off) or not. Lots of discussion here about doing lien research: http://www.foreclosureradar.com/forum/buyers-and-investors/buying-auction/which-liens-are-not-wiped-out-trustee-sale