I am going to a trustee sale in Chino, Calif. for a specific home I had made a previous offer on at short sale and Fannie Mae rejected. If I get the home at auction, can Fannie Mae or anyone else reject the sale if I pay cash for the property? I have spoken to the owner’s who no longer live there and they have assured me they want it sold as they have purchased another property, and that the only lien on the property is the 2nd half of the property taxes. Also, are there any fees charged at the time of auction, such as escrow fees or buyer premium fees? And, is there a way to make a cash deal with the bank directly prior to the actual sale date? Thanks so much.
Hi Melodie, We have a great video on what happens at a trustee sale. Check it out at http://www.foreclosuretruth.com/blog/sean/video-foreclosure-auction-guide/? The bank will make the first bid which is the opening bid. You will need to show proof of funds in order to bid. If you are the winner you will give your funds to the auctioneer who will give you a receipt and the trustee will prepare the trustees deed and send it to you. Provided the trustees deed is recorded within 2 weeks then the effective date of the sale is the date you officially own the property. It is possible that a sale can be rescinded and your money returned. This typically happens if there was a title error, process error or a missed stay from a court action like a bankruptcy filing. Although it is rare to have a sale rescinded it is possible.
Hi there, what would qualify as proof of funds prior to an auction beginning? Would just a simple bank statement do for that
Hi jddog, welcome to the community. At a trustee sale, you pretty much need to bring cashiers checks. You can check with a particular trustee to see if there is anything else they will accept, but pretty much every deal is based on cashiers checks. If you are interested in more than one sale on the same day, best practice is to bring a few checks made out to yourself, which you can then sign over to whichever trustee represents the property you buy. Since you won’t know the amount, having a few checks can help reduce the amount you advance upfront. You’ll get a refund for any overage, but I prefer not to put out more than I have to. Let’s say the opening bid is $250k, and you are will to bid to $500k - in that case you might bring one check for $250k, 2 checks for $100k and 1 for $50k. With that combo you can give them $250, $300, $350, $400, $450 or $500, thus not having to be out more than $50k for any bid amount in the $250-500k range. Any overage you do give them you’ll get back, together with the deed, in 1-2 weeks.
If you aren’t going to bid yourself, and have an employee do it, you can either have the checks made out to the trustee (very difficult when bidding on multiple properties) or go ahead and have the checks made out to them. Given the large amount of money, I recommend carrying an employee dishonesty policy. They have a pretty big deductible, but way better than handing someone half a million dollars or more made out to their name, and hope they are honest. Plus employees tend to reconsider running with the money if they know a big insurance company is going to be hunting them down vs you. YMMV.
Hope that helps.