How do I buy a foreclosure at an auction?


#1

What happens if I win the bid at a Trustee Sale? Do I need all of the money at the auction?


#2

If you win the bid at the auction, the entire amount of your bid is due immediately. Most bidders will bring cashiers checks made out to their own name that can then be signed over to the Trustee when you win.
After they take the check, you fill out a brief form with your name, address, and other information. A couple of weeks later you will get a deed to the property transferring it into your name - please keep it safe.

Also be aware that Trustee Sales do not come with title insurance, it is very important you research the title on any property you are interested in bidding on.


#3

Would you recommend buying a TSG policy before or after the bidding?? I would imagine that buying before hand would be a waste of money especially if one didn’t “win” the bidding. James Frangella


#4

TSG’s are typically only for the foreclosing beneficiary, title insurance is largely unavailable at auction. This is one of the most significant hurdles to buying at auction, and most regular auction buyers get very good at reviewing title and essentially self insuring. The good news is that the trustee sale itself can actually help clear up title as it wipes out many claims that are junior to the loan going to trustee sale. Build a relationship with a title company. Take their chief title officer to lunch. Find a hungry title officer who is willing to look at some deals and provide advice in exchange for your escrows. Once you have a good understanding of the risks you’ll be able to asses the risks of each deal and determine if it is worthwhile to buy without title insurance.