i can’t find out were i need to look for this info.
if i buy at auction on a “property auction” then i own the property at that time?
if the auction is for the “note auction” only when do i get control of or own the property?
HELP please
Hi Howard -
Read the auction advertisements carefully … most will specify that they are selling bank-owned (REO) property … or … they are “trustee sales.” These auctions may be conducted in similar fashion, but they are also very different.
Bank-owned (“property”) auctions: There are many auctions of bank-owned or real-estate-owned (REO) property held across the USA. Sometimes these auctions advertise themselves as “foreclosure auctions.” Most of these are in reality “post-foreclosure” auctions of bank-owned property. Lenders that have large portfolios of property commonly contract out with auction companies to sell off some of their inventory. They post low opening bids, entice large crowds into rented halls, and then fast-talking auctioneers adorned in tuxedos work the assembled into a competitive bidding frenzy (“hup! hup!”). In these auctions you are buying the property.
Trustee Sales (Sheriff Auctions in judicial foreclosure states): In these auctions, you are buying the lender’s interest in the loan (Deed of Trust in CA) that is going to sale. Typically within 5 to 15 days following the auction, you will receive a Trustee’s Deed Upon Sale. When you record the TDUS you ARE the new owner of the property with the very important qualifier that you must pay off any senior liens/loans recorded vs the property.
I should add that Trustee Sales may offer greater opportunities for profit vs REO auctions, but there are additional risks, such as identifying senior liens, negotiating with tenants and/or former homeowners to vacate, etc. Plenty of discussion on this forum on these topics.
You need to tell us exactly what add you are reading - preferably a web site.
That will tell us what you are looking at. If you are looking at some kind of legal notice published in a paper (as opposed to an ad) or a copy of a foreclosure notice recorded w. the county recorder - then that is a “real” foreclosure sale notice. There are services (the best being Foreclosure Radar in Calif. where you are that compiles this info.
What you might be looking at, as Danny above says, are simply sales adds for phony auctions. Not only, as he states, are the opening bids meaningless, but there is no guarantee the high bid will even be accepted. Sometimes (not always) they will state there is a “reserve” price - meaning that if the gullible bidders don’t bid high enough, the property isn’t sold.
Every once in a while, Notes themselves are sold. Usually these are bundled (you have to buy several) and should only be bought be experienced investors. There are horrendous risks in buying Notes. They definitely aren’t meant for someone like you.
Many professional buyers, in the past several months, are finding deals on the plain MLS. The banks are now deciding to sell some of their REO’s at prices low enough to attract investors. You have to make cash offers to get one of these (most of the time). Banks are also approving short sales at low offering prices. You have to be prepared to make offers on many properties in the hope one is accepted.
thanks for the info. i’m looking at a property on “foreclosure radar”
ID # 512217084. this property will be auctioned off by “auction.com” in a ballroom type setting in a rented hall, and then fast-talking auctioneers adorned in tuxedos . it is a trustee auction. the property has a 1st for 80,525 and a 2nd for 98,337. i need to go the the county and look for other liens/loans. hope this helps in your great ideals you have given me. i’m only looking at conds for income. thanks
Properties you see, here, are Trustee (Foreclosure) sales. Auction.com does run Trustee Sales (as shown here) as you describe. The same company does run so-called “plain” auction sales. Those are the ones where high bids often don’t get the property because the bank owner doesn’t think it is high enough. On the sale you describe, you will get a Trustee’s Deed if you bid more than the lender and other bidders. Be aware that less than 10% of their sales go to outside bidders. Half will be postponed and most of the rest will go to the bank.