I’m in WA, no past experience on buying at auction. I’m not clear on the steps involved after winning a bid. Could someone help clarify?
According to the law, a) the Trustee Deed will be recorded within 15 days after the sale. b) if owner occupied, the purchaser will be entilted to possess the house on the 20th day following the sale. c) if renter occupied, the purchaser may either give you a new rental agreement OR give you a written notice to vacate the property in sixty days or more before the end of the monthly rental period.
Do you get keys from the trustee? If not, what will happen on the possession day? Do you just bring tools to unscrew the door locks?
if renter occupied, does this “60 days” start from the trustee sale date?
If renter occupied, can the old landlord refund his original security deposit? If not, if the renter doesn’t renew the lease, he loses his security deposit and can live there for 2 free months (60 days); if he renews the lease, do you expect him to put in another security deposit?
Between the sale date and the final possession date (15 or 20 ~ 60 days away, even longer if eviction), what insurance to buy? In addition to sending notice to owner or renter, what else should be taken care of?
In WA the new owner does have entitle to possess the house 20 days after the sale. If they do not vacate on the 20th day you would then need to formally evict them by filing an unlawful detainer. If occupied by a renter you can give the appropriate notice after the trustee sale but in order to be on the safe side you may want to calculate the date from the filing of the trustees deed.
This is typically why most investors will consider offering a cash for keys incentive which may help speed things up and provide the necessary funds to assist the occupant with moving expenses.
You will not get keys from the trustee and if you have had to go through a formal eviction you will then need to change the locks on the property. If you negotiate a cash for keys agreement you would get the keys from the occupant and then change the locks.
The security deposit is an agreement with the prior owner and if they lost the property at trustee sale it is doubtful they will refund the deposit to the tenant although the tenant can sue the prior owner in small claims court. Although the tenant does continue to owe the rent while they occupy the property it is doubtful that they will pay the rent during this time.
You will want to get standard fire insurance on the property by contacting your insurance agent.
Very detailed! Thank you a lot, Michelle!
When people talking about “cash for keys”, usually how much is it?
Hi Lily, The amounts will certainly vary by the situation. I have heard anything from a few hundred dollars to the amount of one months rent to the amount of the security deposit. Some investors have told me that they take a look at their holding costs and costs of eviction to determine the maximum amount they are willing to offer. Then there are the RARE cases where the investor is willing to pay several thousand dollars to get them out of the house without doing massive damage or selling off the appliances and other fixtures.