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Checklist to buy properties at public auction

By RealtyTrac | Published: Jul 28, 2010 | 26 Comments

Real estate auctions are a quick and efficient way to sell and buy property. They can also yield great deals for buyers who have a plan in place and don't get caught up in the exciting auction atmosphere. Use the checklist below to make sure you're prepared to bid and buy.

  1. Prepare your resources

    Make sure that you have the resources in place to purchase this property. This includes securing pre-qualification for a loan and enlisting the help of a buyer's agent if you're not comfortable contacting the owner and navigating the negotiations and closing process on your own.

  2. Confirm property status

    Check the history of notices and call the trustee listed to check if this auction has been canceled or postponed. Auctions can be canceled or postponed for a variety of reasons, sometimes at the last minute.

  3. Evaluate bargain/investment potential

    Determine if this property represents a good bargain or investment opportunity. Start by subtracting the property's outstanding liens and loans from the property's estimated market value to determine the property's estimated equity.

  4. Attend the auction and bid

    Call the trustee periodically up until the date of the auction to check if the auction has been postponed or canceled. Bring the necessary funds required to the auction and don't exceed your predetermined maximum bid amount. Auction procedures vary from state to state.

  5. Pay and take possession

    If you submit the winning bid at the auction, the trustee should provide a certificate of sale or a trustee's deed. You'll have to pay the full amount of your bid on the spot or within a limited timeframe determined by state foreclosure law. Once you've satisfied all the necessary requirements, you can take possession of the property, which may require eviction of the former owner in some cases.

Comments

By Brenda Collins,  Sat Sep 4 2010, 16:24
what hidden cost other 5hen lein holders how do i fine do i reachsearch the title at county records
By William Etling, Realtor,  Tue Dec 21 2010, 09:00
Beware: If you are entering the dark forests of foreclosure, get help. Buy a title report for starters. IRS tax liens are not wiped out by foreclosure. In some cases junior liens may survive. Lawsuits, homeowner's association assessments, and mechanic's liens may still be pursued. Leases can trip you up. Recorded easements will certainly prevail. And eviction is no fun for anyone.
By Fran Rokicki,  Fri Jan 7 2011, 16:40
I would suggest that if you are considering buying a home through an auction, that you bring along a Realtor for advice.
By Angela Mancinone,  Fri Feb 25 2011, 07:16
Great Information for anyone thinking about an auction purchase.
By Hackett13,  Fri May 6 2011, 04:46
excellent information, move over Donald.
By Doctor B,  Wed May 18 2011, 17:06
There is more to this process! I work at the courts. Please do research before attempt to bid at these sites. Do some research, ask a expert.
By Open Every Weekend,  Fri Jun 17 2011, 09:28
Good Article and checklist. If you're interested in auctions then make sure you check out
http://www.OpenEveryWeekend.com
Sign up to become a member for free and see the new auction format. Whether you're a buyer, seller, or agent, we've got something for everyone. See what's selling this week!
By M T Friese,  Sun Sep 18 2011, 23:32
You do not need or want a real estate agent to help you with a trustee sale. They can help you establish potential selling prices, though.

You need to know what you are doing before bidding. You need to know how to research titles at the recorder's office or hammer out a deal where a title insurance company does this for you. This is critically important to find out what encumbrances exist!

Verify common address matches legal address. This can sometimes be accomplished using the county or city's GIS system.

In most cases you want to make sure that you are bidding on the 1st TD. Bidding on a second is usually a wildly expensive mistake.

Check for back taxes at the county tax collector's office.

Trustee sale advantage: Most junior liens are wiped out by foreclosure. This includes most everything except tax liens. This is a huge advantage over short sales. When buying a short, you must at least partially satisfy the second holder. At a trustee sale, the second holder loses all claim to the property.

Inspect the property. You won't get a RE agent's tour, but you can do things to better assess the property. If the property is occupied, you can't do much except drive by and maybe look over a fence. If it is vacant, go and peek though the windows, doggy door, and look in the back yard. Bring a camera and take lots of pictures. This helps disarm suspicious neighbors.

Attend a few live auctions before bidding. Understand why other bidders are bidding on certain properties and avoiding others.

The best part of a trustee sale: After you win the bid, you can take possession that same day, assuming it is not occupied and has no valuables inside. Nobody will give you a key, so you need to establish a working relationship with a locksmith to open and rekey houses.

When the trustee's deed is sent to you about 10 days after the auction, you must record it yourself. Call the county recorder for details.
By Jim Hardy,  Mon Sep 26 2011, 12:55
You don't actually have to sign up with Realty Trac to get the FREE information on the auction. They just do the information leg work for you. All information is at the courthouse. Free for anyone to see. SOMETIMES you can get it via a courthouse website look up. Some courthouses do make it that easy anymore.
By Dava,  Wed Dec 28 2011, 08:40
I'm an investor carefully approaching distressed real estate and this "checklist" seems irresponsibly inadequate to me. As Etling mentions above, there can be complicated issues to address and a higher level of due diligence than is mentioned here is always required before approaching a property in auction. A realtor experienced in this specific area can be helpful but isn't essential. An attorney can be very helpful with the title and possession issues. It all depends on the capabilities of the buyer.
By Jeri Creson,  Fri Jan 27 2012, 13:22
Trustee sales are best left to pros, and licensees - You can become a pro - but, please do the footwork and walk yourself through the process on "mock" sales - where you don't actually bid, but follow along as if you had, and learn before you bid. There are many pitfalls as noted here. And another consideration: Before you go poking around a seemingly vacant house at trustee sale level - know this - many of these are occupied by very unhappy people of varying temperaments. Walking through an unlocked door can get you shot. Or worse. It is trespassing, after all. Please be very careful. There are no deals worth getting killed over.
By Stumper68,  Sat Feb 4 2012, 15:26
A realestate agent is of no help here, been there done that. Of course I was promised this that and everything. Agents have no idea how to do anything other that trying to hoard listings and using comps, even when asessing a homes value they just refer to the other listed prices - boy thats hard and intuitive work. Give me an agent that guarantees me the asking price and I'll hire them, if you'll make up the difference in asking and actual sell out of your commission I'm waiting for you - I'm buying an average of 2 homes/month.
By Smatrmoney1,  Tue Mar 6 2012, 12:25
Smart Money Yes there are many pitoffs to buying foreclosures at trustee sales my one advice is to attend 5,6,8,or 10 sales, ask questions, know what type of trustee sale is being offered. Yes I brought a house at auction not knowing it was an IRS auction with an IRS lien attached. I had to EAT IT! I made $$$$.
Make sure you get the trustee's business card at the auction. Call the trustee
with the address of the property in order to make the lien holder of that property
a lower offer who knows that may be a better deal.
By Bumb Deal,  Sat Mar 24 2012, 07:45
Bank owned Foreclosures can be a real Bumb Deal for the buyer! Banks by law are not required to make any disclosures regarding the condition of the property. Believe me when I say IT IS BUYER BEWARE! A perfect example of this is the REO property located a 2138 Paseo Donito, Alpine, CA 91901. The roof leaks & needs to be replaced & there is mold & water damage on both the first & second floors due to the leaking roof. There are 2 private road maintenance agreements tied to the property. There are a number of access easements across the property. Alpine Fire is owed $4,500.00 for hazard abatement work done by them. None of this was or will be disclosed by the BANK! BUYER BEWARE!
By Stephanie Leon 786-664-7710,  Sun Apr 29 2012, 18:01
Please Beware when buying at Auction..
By Matie,  Thu Jun 7 2012, 03:53
Agent are useless for auction. For everything other http://www.indexpost.com/ Greatest data for all U.S. Foreclosure. Each state, city and streer is on that base
By Katie Wong,  Sat Jun 30 2012, 10:45
Katie,
I have been looking for property for 6 months at the Evergreen area in San Jose and very specitic area. I have found a property that I love and asked my agent to sent out a inspector for inspection and she did not. She told me the sale agent push out the offer day and it was not. At the same time I'm trying to get an inspector out myself and found out the house was sold.
Now I'm trying to look for a house in the auction and would like to learn and figure out how to get these information on the property. I know most forceclosure property required a fee to get the info.
I had read all the info posted on this website and greatly appreciated for the info. Please do post any info that I shoud be aware
By Kenny Nang,  Wed Sep 5 2012, 23:34
I saw an upcoming property to be auction at Ventura County courthouse. Any good website for auction 101 for a novice investor, For successful bidders, are you required to pay the full amount? When are you expected to pay for the full amount?
By wennick2006,  Wed Feb 13 2013, 12:19
Why is it that these real estate companies want to SELL You the Listings of foreclosures out there....Don't the Banks have websites of their own to sell foreclosures or don't they want to sell them quickly. Buyer Beware is righy..sign up for a Trial online to get foreclosure listings and end up paying like $49.00 per month...that is crazy. Where can we get truly free listings?
By Priyanka,  Thu Mar 21 2013, 20:10
please send me details if any of these houses are available for sale. my email address priyanka.deshmukh@gmail.com
By Paul Smith,  Thu Jun 6 2013, 06:19
The street view is of my garage on Zurich. My house nor my garage will be up for auction. This street view is misleading. I have lived here for 13 years and do not know what house is coming up for auction. My house is for sale at $649k; see 1323 Zurich Lane (the garage is in the picture).
By morrisonne,  Tue Jun 18 2013, 08:59
NOTE: RealtyTrac goes through these postings and deletes what they don't like; please copy and pass this info forward; they already deleted it once.


IMPORTANT: RealtyTrac (and other, similar sites) simply scour court records for Lis Pending filings and post them. This does NOT necessarily meant the house is in default, available to buy, or anything else. It can simply be a small lien being requested for services unpaid; it could be anything.

This is also why these websites often have no pictures or info on a property, as you would expect a realtor or bank to have; they're just reposting court filings and know absolutely nothing else.

So. Buyer beware - and also beware of those companies that try to get you to invest long-distance; there's a large corporation offering seminars, etc, and their goal is to get you to buy blocs that are in their portfolio. Buyer beware, beware, beware. If you can't go to a property yourself, and if you cannot see the legal documents relating to the property, DO NOT buy.
By KKIM,  Sun Aug 4 2013, 20:05
the property at w el caminito pl is not liveable condition! no further info can be given BEWARE!
By Anila,  Tue Oct 22 2013, 11:07
is that house sold out ?
By Juan Carlos Chavez,  Sun Dec 15 2013, 22:27
HELLO I RENT THIS PRPIEDAD 19911 NW 3rd PL,MIAMI FL 33169 FROM OCTOBER 15 IN THE AMOUNT OF $ 800.00 TO CONTRACT SIGNED BY THE owner FOR A YEAR I CLEAN HOUSE, REPAIR MASTER CLOSET INSTALL INTERIM SINK IN THE KITCHEN,the owner; INSTALL A NEW TOILET IN THE BATHROOM 1 TOTALLY MISSING FOR REPAIR THE BINS ARE eXPOSED to shawer HER 2ND ROOF REPAIR HAD SOME bATHROOM FLOOR SLAB LEAKS BROKE IN SEVERAL PLACES AND fELL MISUEGRA NOT REPAIR TIME FOR A LADY OLIVE HARRIOTT NEVER TOLD ME TO YOUR HOME he was FORCLOUSER BUT SUDDENLY ON ME TAKE AND USE ANY CASE IN COURT FOR 13-36462 CA-01 take Me FRI MY FAMILY AND I HAVE A LEASE FOR A YEAR hE wAS THE VICTIM OF A VERY USUAL TODAY! CON!! !!! PLEASE HELP!!
juancarlos_64@yahoo.com
By Dan Shelley,  Tue Mar 18 2014, 16:25
I was going to buy this property on 211 Everett Park Drive. You can contact me about this house. I have a Home Inspection report you should see before putting a bid on this house.

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Buying a property at a public foreclosure auction is not for the faint at heart. It usually requires patience, persistence and a fair amount of cash, since most state foreclosure laws stipulate that the winning bidder pay all or part of the winning bid on ...

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