Have you purchased house at sheriff auction or know things about it?

[kbpaulie]

Looking for someone who has either purchased property at a sheriff's foreclosure auction or can tell me some things about it. We're thinking about it and are wanting more info.....

[wapiti]

Try Foreclosure for Dummies, The Idiot's Guide to Buying Foreclosures, or similar books at the library.

[Spryte]

We have friends who purchased a foreclosure, without a walk through. Not sure if it was an auction. I can ask. They paid very little, in an expensive area.

 

It has been a long road for them, with lots of repairs and mold remediation, but they are happy. The pool was a nightmare, and the basement.... Ugh. But they are DINKs, lots of extra resources re: time and money. Plus, they are project people.

 

I never would have had the patience they did to get that house in shape. I think it can be good for the right type of people. (Not me.)

 

I would definitely check out those books!

 

[sbgrace]

We own a home purchased that way. My parents actually bought it orginally though. You have to have all the cash up front here and we still owned our old home at the time so didn't have that kind of money!

 

I remember reading to check on the title. I was told that the banks do their own title work on the homes. Ours was an FHA backed home so supposed to be relatively safe. We did go to the court house and looked for liens or similar on the home. At any rate the title search after we bought went fine. I do think that could be a potential risk.

 

Here there was, maybe still is, a man who was buying anything worth buying here. That drove the price up on our property unfortunately. I was told that, before he came, good deals could be had. We still paid under value but once we did what needed done it was closer to market value in spending. We knew, while bidding, it had gone higher than it should have but really wanted the home. How it all actually turned out is a long story but it wasn't the deal it should have been.

 

Nearly everyone in the room had been in "my" house prior to that auction. I guess people here anyway routinely break in to check out the condition before bidding on homes. I was shocked by that! We knew the major work that would be needed--the previous owners were neighbors of my parents who inherited a home in the country and abandoned it. There were some surprises still though even while we anticipated some pretty extensive work.

 

So I guess I'd say risks are condition of the home (expect problems) and maybe a risk of title issues. Cash up front would have put it out of our reach without my parent's financing. I can't think of anything else!

 

We're really happy with our home.

[kbpaulie]

OK, yeah, people have done this. The house is just down the street. It was on the market as a short sale, so we've had a chance to walk through and did put an offer in on it. It's in GREAT shape!!!! They accepted someone elses offer, who is living in it, while the sale is pending. (Yes, odd.) But it just came up at the sheriff's website as a foreclosure. Obviously it might not go through auction as the short sale may go through. But we're trying to decide if we want to try for it or not.

 

Here 99.9% of the properties go back to the bank at the sheriff sale. So it's really tough to get. But we're wondering....

 

* How much of the outstanding loan does the bank need to "let it go"? Let's say it's a house currently valued around $280k. 2006 loan was for $300k. (Short sale price was listed at $200k) Would $225 work at auction do you think? That's where we're stuck - what does it take for the bank to not want to purchase it?

* Did you have a title search done before purchase and then you were responsible for outstanding things? Like taxes (which are current) and any other liens against the house? (Like we talk to a title agent who said buy it, then have the search done and they'll clear up anything outstanding. That didn't sound right. I think they can't clear it up, you take it w/ the extras.)

* There is a 2nd loan on the house for $75k from 2006. My understanding is that we would not be responsbile for this? Anyone have thooughts? (I believe that at auction or short-sale they just lose their $ and can choose to go after the original homeowner.)

 

Yes, I understand most, if not all of you are attorneys, and you are not providing me "legal advice" :)

 

Anything else?

[kbpaulie]

Try Foreclosure for Dummies, The Idiot's Guide to Buying Foreclosures, or similar books at the library.

 

Duh, I have over 200 books from the library and typically research w/ books.... except this time. Thanks for the idea! Found some at our 'brary!

[sbgrace]

.

 

Here 99.9% of the properties go back to the bank at the sheriff sale. So it's really tough to get. But we're wondering....

 

* How much of the outstanding loan does the bank need to "let it go"? Let's say it's a house currently valued around $280k. 2006 loan was for $300k. (Short sale price was listed at $200k) Would $225 work at auction do you think? That's where we're stuck - what does it take for the bank to not want to purchase it?

 

Here, the banks seem to often begin the bidding at their court judgment amount. That judgment will include what is owed but also tons of fees and penalties and similar. Sometimes the starting bid, then, is actually more than the value of the home here. Actually, most of the time that is true here. That's why most properties here go back to the bank. In our case, though, the starting bid was quite a bit under the value of the home and under the judgment amount. I could read the court documents online easily. I can't remember if the judgment amount was also listed in the newspaper announcements or not. Here there is a sherriff sale type website and they do eventually put the starting bid on the site. I've heard a bank can send a representative to bid up from their starting bid. We watched several auctions and I never saw that happen here or, if it did, it was very unobvious. In "our" auction there were 4 homes that had start bids significantly under their (apparent) value. One had no bids, two sold at auction for what I expect were reasonable amounts--one to the original homeowner interestingly, and ours had a bidding between 5 parties ending with us and the "buys all the good stuff" guy. Ours was the best deal that day when it started and the worst at end!

 

In your case I'm a little confused as to why it's going up for auction with a short sale. I'd expect you'd need to be over that short sale amount given they stand to make that much anyway. I wonder why they are bothering!

 

* Did you have a title search done before purchase and then you were responsible for outstanding things? Like taxes (which are current) and any other liens against the house? (Like we talk to a title agent who said buy it, then have the search done and they'll clear up anything outstanding. That didn't sound right. I think they can't clear it up, you take it w/ the extras.)

 

Here anyway once you buy it you buy it and assume any debts not settled in the judgment that released the home for auction. The bank involved will attempt to list any lienholders on the title in their suit. In other words, the suit against our former neighbors included not just them but a couple of lienholders who, I assume, had judgments against the neighbors. The bank wouldn't own the home outright either if there are leins not mentioned in the original suit. So they do their own title work. But I read you should do a title search yourself to make sure all of it is clear, as you would be assuming responsiblity. My husband and dad wouldn't do it and had people telling them it wasn't necessary, particularly given the FHA was involved. But it made me nervous! We tried to do our own search but didn't have it done professionally until after we bought the home. Back taxes aren't a risk here as they have to be paid for it to be released for auction but things like mechanics leins can be in my understanding. We did have present year's taxes and I think they had to be paid pretty much up front when getting the title. It may have been the time of year for us. I'm not sure. Clearing up anything outstanding would mean paying off the lein, wouldn't it? I don't know what the title agent meant!

 

* There is a 2nd loan on the house for $75k from 2006. My understanding is that we would not be responsbile for this? Anyone have thooughts? (I believe that at auction or short-sale they just lose their $ and can choose to go after the original homeowner.)

 

Here that 2nd party, assuming the primary lein holding insitution knows of them, would be listed on the judgment, as a defendent so to speak, with the homeowner. So the bank would not to have to pay that 2nd party once the judgment was filed. At least that is my understanding! That 2nd party could, though, bid in the auction to try to protect their interest I think. The danger comes in if there is someone not mentioned in the suit who might have a legal financial claim to the house. If you don't do your own title search you're relying on the bank's work in that area.

 

This is all my understanding of the situation here--I'm clearly no expert! Your auction agency or sherriff department (if they do the auctions themselves) may have information about the specifics in your area.

[Um_2_4]

We tried many times to by a house through a foreclosure auction. Each state is different. Is this a foreclosure sale or a sheriff's seizure sale(usually drug related etc.)?

It is possible for a house to be under a short sale contract and still be listed as going to auction on xx date. But in our cases the court usually delayed the auction. The bank was still trying to negotiate terms for the short sale, but didn't want to lose the option of foreclosing through the courts. Make sense?

I would see if on the website they have some contact info, they may have basic info available on their website somewhere (a FAQ or the like).

Otherwise google " buying a house on courthouse steps in XX" , we had an agent who was helping us, but he is a friend of the family and does this for himself and turns them into rental properties.

[kbpaulie]

Yeah, i'm assuming it's not going to go to foreclosure auction (not seizure) but will wait until the shortsale, but we're just wondering and thinking if there is any chance.

 

Thanks all for some good info.!