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     | Monday, May 08, 2000 - 06:08 am  Has any person on this board ever bought a property at a foreclosure sale? If so, do you need to register? What percent must be paid at the time of sale or do they give you time for the paperwork to get completed and then close? Do you register to bid? I'm looking at purchasing a home this way and going to a sale to scope out the procedure etc. but never having done it. I know of one home in my community recently was foreclosed for 79,000. It is now for sale at 420,000 --a bit overpriced, but not by much. Is the auction orderly or is it like the commodity pits? thanks.
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| | Monday, May 08, 2000 - 08:35 am Is the property LISTED? Usually, REO (real estate owned) is sold like any other property. Are they holding an auction instead of listing it? And have you read my Auctions page? http://www.bayhouse.com/auction.html
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| | Monday, May 08, 2000 - 08:48 am No,it's a foreclosure sale listed in the legal newspapers. I've never been to a foreclosure auction. I'm not expecting miracles. But I've driven past the property--good neighborhood. It needs some cosmetic work, which means that it will have other work necessary. Looked up what they bought it for. Checking into back taxes and other liens. I'm not going to necessarily buy this one, but I wonder what the scene is like--placid or crazy. Yes, i did a search on keyword but I typed in "buying at foreclosure sale" which-if someone had posted--I missed. thanks.
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| | Tuesday, May 09, 2000 - 09:05 am A lot of my foreclosure postings were at the old forum or on pages that aren't up anymore. The key is to talk to the owner. I have found that some owners are quite happy to explain all defects. I worked with several clients in the early 90's who looked for foreclosures. It's amazing HOW MUCH can be wrong with a property. Bob Bruss, syndicated writer, investor and attorney, worked my neighborhood. He bought at foreclosure sales as well as REO and pre foreclosure fixers. And when a bank pissed him off, he just flew down to LA for a visit with the bank president. I attended Bob's RE Legal class many years ago, one of THE best classes ever. He had started out like most people, with hard work (he started with a run down apartment building) and he learned his lessons along the way. He wasn't born a millionaire, he earned it. And the Bay Area housing appreciation helped a lot. None of my clients ever bought a foreclosure property. No deals. Everything from bad foundations to annual floods to defective titles. My clients were all looking to buy BEFORE the sale, getting new financing, assuming the existing loan or doing some kind of creative deal. After I first got my RE license in the 80's, I was contacted by several "No Money Down" attendees and learned quickly that it's almost impossible to find something for nothing in the Bay Area. In rural AZ and NM I found that you can probably buy with no money down, and cash buyers get huge discounts. I assume you're somewhere in between. Every market is different. When I did the consultation for home owners in foreclosure in the SF Bay Area, I learned that most owners do just about anything to keep their home. If there is good equity, they get a hard money loan. If not, they list and try to sell. My clients all had received NUMEROUS mailings from real estate brokers, lenders, investors and attorneys who tried to get their business. As far as buying AT the sale, it took all cash, bidders had to be registered and show a cashiers check for at least 10% of the bid. I'm sure that these rules VARY greatly. In some States where MORTGAGES are used (instead of Trust Deeds) the foreclosed owner had a 1 year right of redemption. I recommend that only VERY SEASONED investors with LOTS of extra cash buy at the foreclosure sale. California actually had to make a law requiring sales to be held at public locations during normal business hours. Unscrupulous lenders would hold the sale at 2 AM at some pier hoping that nobody would show up for the bidding. And still most properties receive no bids, even at 2 PM at the courthouse or title company. Most properties just have little or no equity. I find it hard to believe that someone would let a $400,000 house go for $80K. So maybe the owner was in the hospital, senil or in a koma, and had no friends or relatives to help out. But it's even weirder that nobody bid higher. Something smells fishy.
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| | Tuesday, May 09, 2000 - 09:08 am Forgot to make clear that AT the foreclosure sale you DON'T have the time to finance the property. You had to bring the rest of the cash in a day or so.
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| | Tuesday, May 09, 2000 - 03:30 pm I use to handle foreclosures and REO. The sales were quite interesting. We held them on the courthouse steps and took the highest bidder.
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| | Wednesday, May 10, 2000 - 07:05 am it looks as though someone is buying a pig in a poke. Nothing beats a little undisclosed foundation trouble. back to the old way of buying real estate--soon to be discounted 30%.
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| | Wednesday, May 10, 2000 - 10:13 am I have found that if a deal looks like it is too good to be true, it usually IS too good to be true. That doesn't mean that you can't get good deals. But it goes back to that four letter word: WORK The easiest and best deals are the ones nobody knows about. Those are the properties that are up for sale and usually NOT advertised as distress sales. Once it says "foreclosure" in the paper a zillion buyers call and think they'll get this property half price. I recently saw a property advertised for sale for over $20K, reduced to $17,5K and sold for $12,5K after $10K were offered. You won't get a $400k house for $250K, but $330K is still a great deal. Unless you have access to the MLS and public records and you have a TON of time, you need an agent who'll work for YOU and isn't afraid to make LOW offers. Finding that agent is the tough part.
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