if i’m planning on buying a property at an auction and have several partners, do i need an equal amount of cashier’s checks in each of their names? also if the person is not present, do i just need a copy of their ID or do i need other documentation?
Hi Steve,
There’s no rule that that dictates the amount of any one check (if you win the auction the trustee will ask how you want to "vest" and that's your call and will not be determined by the checks.). However the checks are ultimately pieced together, the auctioneer/trustee simply want to make sure the pooled amount totals up to at least the winning bid (the $ amount you tender will likely be a bit over). It’s not a bad idea to get multiple checks in varying amounts (e.g. $200K, $100K, $50K, $50K, $25K, $10K, $10K, 5K, etc.). That way it's easier to come close to the final bid amount. You'll get any "overage" (overpay) amount back in a refund check along with the deed - appx 10 days following the trustee sale.
if you’re going to pool money (multiple investors $) to bid, probably better that all parties are present. Most trustee sale buyers have cashiers checks made payable to themselves and endorse the checks over to the trustee if they win a bid. If you have other investor’s checks (“pooled money”) the parties must be present to endorse them over. The alternative is to have the cashiers checks made payable to the specific trustee handling your target property. But coming to the auction with checks already made out to one trustee will, of course, limit you solely to properties being auctioned by that one trustee. Having checks made payable to yourself affords you more flexibility to bid on other properties.
One other thing to consider… if the checks are made out to other investors names, who are not present, you may have a problem when the auctioneer asks for any interested bidders to step forward and “qualify” (just before the bidding starts). Part of that qualification process requires the auctioneer to check photo IDs and to make sure the party “qualifying” has sufficient funds in hand to at least meet the opening bid amount. If the checks are made payable to someone other than you, they will need to step forward to show ID (you can’t show someone else’s ID as you might have just found their wallet ;). So if your other investors will not be there with you, it might be best to have the checks already payable to the trustee (rather than endorsing them over post bid win). But again, that limits you to bidding on property offered by that one trustee.
Note: to avoid any confusion, in my reply above, I should have said “auctioneer” not trustee as the person who will ask how you want to “vest” after a steps bid win. That vesting info will be conveyed to the trustee via the auction company.
Hi Steve, In years gone past I would have said you could purchase in your name and then take title under the partnership when you record the Trustees Deed. Given a few very highly publicized indictments and arrests you would want to proceed very carefully when bidding on behalf of a partnership. 1. Make sure you have a real partnership, preferably with legal documents to back it up. You don’t want to be accused of collusion or bid rigging. 2. If you have a legal partnership, make the names out in the partnership and bring a document showing who has authority to sign on behalf of the partnership. Just be sure to run this by the auctioneer before you plan to bid so that you know what they will require. And no you can’t sign for someone else, even if you have their ID - at least not without a limited power of attorney, which is another possible solution to your dilemma. We hope this helps.