I’m thinking about bidding on a property next week. I know I have to bring a cashier’s check, but I’m confused about what value I should put on it. Do I calculate my bid before I get the check, and get the check made out for that amount? This locks my bid in before I even get to the auction. If somebody bids higher can I out bid them with a personal check or a second cashiers check?
Most steps buyers will have a series of cashiers checks in differing amounts with them at the ready (e.g. $200K + $100K + $100K + $50K + $50K + $25K + $25K + $10K). The cashiers checks are made payable to you and you can endorse them over once you’ve successfully bid on a property. You could also have the cashiers check made payable to the trustee for the particular property you are hoping to buy, but that is impractical for most steps buyers as auctions are commonly postponed or cancelled, and you typically want to be ready for other (different property and a different trustee) opportunities. Hence, having the cashiers checks made payable to you, gives you the most flexibility. Getting the amount exactly right is tricky. That’s why most investors have multiple checks in differing amounts. That way the checks can be combined to get as close as possible to the final bid amount. You will likely be over by a few thousand. Ex: Final bid is $379,500 and you can combine your checks to make 380,000. Not to worry, the trustee will send you a refund for the overage along with the deed.
I will take my cashiers checks back to the bank every month to have them re-issued in the same amounts. Cashiers checks do not expire. However, a few trustees will not accept cashiers checks that are more than 30 days old and I would hate to lose at the steps because my checks were not current.
Danny is absolutely right. You can also check out the video that Sean O’Toole the Founder of ForeclosureRadar produced on what happens at a trustee sale. Check it out at http://www.foreclosuretruth.com/blog/sean/video-foreclosure-auction-guide/
I should add that you will not be able to use a personal check at the steps … cashiers checks are the exclusive currency. I know that some investors have combined cashiers checks with actual cash ... However, I've been told that at least one of the major auction services will no longer be allowed to accept cash . So it’s cashiers checks or nothing.
I’d like to know which service will not accept cash!! All sale notices use the words “CASH, or Cashier’s checks etc.” in the wording. Years ago, many Trustees tried to discourage bidding by requiring checks be made out in specific ways. We won that battle decades ago in the appellate Ct. In Baron v. Colonial the Ct. basically said the Trustee had to be reasonable and take checks made out to the bidder himself. You could accept cash, but not require only cash.
Humorous story - A street pharmacist (drug dealer) came to the Okld. Ct. Hse. to bid on a property. When he was asked by the auctioneer to qualify, the prospective bidder asked him to come down the steps to his car. He opened the trunk - which, of course, had a pile of cash in it.
Auctioneer from LPS told me that she would no longer be allowed to accept “cash” ($$). I didn’t ask for an explanation, but given the “bullseye on your back” concerns of walking away from an auction with a pocket full of thousands in cash, I can understand why LPS made this call.