Kari C in SC Posted July 5, 2013 Share Posted July 5, 2013 Whenever I need info, I always think of this board. We have investment properties that we rent. Recently, we put in a full price offer on a short sale. They have yet to answer and now it is scheduled for foreclosure auction. We are considering trying to bid at the auction, but I am getting my ducks in a row. So far, I know I need to go search the title to make sure it is clear. I found the county info on how much you have to pay that day, etc. Anyway, I just thought if anyone had any been there, done that info - it would be great. Thanks! Quote Link to comment Share on other sites More sharing options...
Jennifer3141 Posted July 5, 2013 Share Posted July 5, 2013 In our state, there is a 6-12 month redemption period on the home for the original mortgage holder. And a lot of people have gotten caught by that. Enough to make my DH and I wary about buying a home that way. In MI, you could theoritically make money on that deal if you get a low enough bid on the home at auction, however anything you do to the house in that redemption period would be a loss because the first mortgage holder would get the house back. So if you tack on a $100,000 new kitchen or whatever... you lose that money. Also, we have court cases up the whazoo for houses that had second, thrird, or fourth mortgages tied to the property improperly but judges are allowing them to stand sometimes. So you get title to a house and then a year down the road, a bank knocks on your door with a mortgage you may be responsible for. And even if you aren't, you're going to spend a wad of cash on an attorney to fight it. Quote Link to comment Share on other sites More sharing options...
Kari C in SC Posted July 5, 2013 Author Share Posted July 5, 2013 That was another thing I was wondering about and needed to research more. The bank coming back within that year. That makes me really want to not do this. It is so very frustrating that we actually gave them a full asking price cash offer and they are still letting it go to auction. Making my gray hair grow in faster! Thanks for your input! It was very helpful! Quote Link to comment Share on other sites More sharing options...
sbgrace Posted July 5, 2013 Share Posted July 5, 2013 We did bid on a house that way--the one we are living in now. We were out-bid at auction, then bought the home from the person who out-bid us. Here no one can come back unless a lien holder is not listed in the auction (ie, in our auction the financial institution repossessing listed the owners, another (secondary) mortgage company, and a personal loan company as defendants. At close of auction, whether the bank or someone else gets the winning bid, those listed individuals no longer hold rights to the property and cannot come back to claim it. Here the homes that are sold due to property taxes are redeemable like that I think, but not the bank repossession auctions. I suppose laws in various states are different. The risk here is if the bank/financial institution misses a lien holder when they do their own title search or if there is a mechanics lien that you hadn't researched. Ours was being repossessed by the government (USDA) and we decided to trust them to do a thorough title search, rather than pay for it to be done professionally ourselves ahead of time. We did do our own title searching at the court house before the auction. Most houses at auction here have starting bids from the bank that are above their values it seemed. Starting bids were available before the auction online. Here you have to pay the entire amount at close of auction, so that limits buyers. Ours had a lot of interest and bids though, unfortunately for us! That's all I can think of. We went to a couple of auctions before ours, to see how it worked. The auctioneer for ours was different though, and the auction itself went differently as a result. Quote Link to comment Share on other sites More sharing options...
Jennifer3141 Posted July 6, 2013 Share Posted July 6, 2013 That was another thing I was wondering about and needed to research more. The bank coming back within that year. That makes me really want to not do this. It is so very frustrating that we actually gave them a full asking price cash offer and they are still letting it go to auction. Making my gray hair grow in faster! Thanks for your input! It was very helpful! We are living in one right now that is in this situation! Although ours has gone differently from the beginning. In my house, the second mortgage foreclosed BEFORE the first one. They did this to protect their interest in the home. Now today, the house was supposedly up for auction with the primary mortgage lender but we haven't heard how that went or IF it went. The house was scheduled for auction three or four time before it actually ever went the first time through. We want to buy this house. We have the cash to buy this house. But we're not going to buy the house until ALL the redemption periods have passed because I've heard wayyyy too many horror stories. It sucks. But here we sit. At least by being here, we know no one is interested in the place. :) Quote Link to comment Share on other sites More sharing options...
kbpaulie Posted July 14, 2013 Share Posted July 14, 2013 We have not purchased this way but have done a lot of research on it. We've been to auction a couple times, bidding once. The house that we're currently looking at was similar to yours - short sale (someone w/ a lower offer than ours got the contract). 4 months later house went to auction (contract wasn't honored). So we're waiting for it to come back on the MLS for another chance. As someone mentioned - attend the auction ahead of time. Does your state have a redemption period? Here they require 10% cash and rest of the pymt w/i a short period of time. Does it have any other liens on it? You had mentioned the bank coming back. I don't think this can happen. The redemption period applies to the owners, not the bank. We were told we'd have issues getting insurance on the house. You pay for it before the deed is avail. Insurance company won't cover it until you have the deed. So we couldn't figure out what happens during that window of time? So I'd say figure out the insurance question. For us the sheriff sets the minimum bid and the estimated value. It doesn't correlate to what is actually owed. Google your county recorders office - this will typically show what loans were taken out on it - you could roughly estimate the outstanding balance if you can't get this info elsewhere. You could also google your county clerk of courts - this will start you on a title search and may show if there are other liens. Also for some reason here 99.9% of the houses around here go back to the bank. Bids are being placed higher than the outstanding loan and value of the house. Not clear on why exactly this is. What I wonder is if the bank gets the property it becomes a write off or some program covers their losses or something. I also wonder if Fannie Mae holds the loan the bank may be required to purchase the house at auction and then the proerty gets assigned to Fannie Mae. I don't think that you can know this ahead of time but not sure. We did not bid on the house we were interested in b/c we decided no to take the risks of another lien, tie up the $, deal w/ the system, and know that we couldn't really seem to beat the system. I've been researching properties, short sales, and foreclosures for 9 months now. None of it makes sense. There is no formula "if this - then this." Hoping in the end we get the house we've been waiting for what seems like forever. Best of luck to you. Quote Link to comment Share on other sites More sharing options...
extendedforecast Posted July 14, 2013 Share Posted July 14, 2013 The hedge funds are coming in and buying everything- and they bid above appraisal district values. There haven't been any good deals for several months. Quote Link to comment Share on other sites More sharing options...
kbpaulie Posted July 16, 2013 Share Posted July 16, 2013 The hedge funds are coming in and buying everything- and they bid above appraisal district values. There haven't been any good deals for several months. Cindy, can you explain what this means, please? Thanks! Quote Link to comment Share on other sites More sharing options...
kiwik Posted July 16, 2013 Share Posted July 16, 2013 here there is some completely weird ownership thing. People have bought houses in auctions only to have all the fitting and joinery removed between the auction and possession and due to some clause the banks use they can't do anything about it. Probably not an issue there but there are some oddities involved in most places it seems. Quote Link to comment Share on other sites More sharing options...
Scarlett Posted July 16, 2013 Share Posted July 16, 2013 We bought our current home thru an on line auction. Quote Link to comment Share on other sites More sharing options...
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