Foreclosure in 85250>Question Details

Mlo151, Home Buyer in 85250

Can I finance a bid at a foreclosure auction in ARIZONA?

Asked by Mlo151, 85250 Mon Sep 14, 2009

i currently rent, but I've been looking at places with my Realtor all summer. then i found out that my rental is going into foreclosure. ideally, I'd like to buy the place that i'm renting at the foreclosure auction, instead of getting booted to the curb next month. can i finance my bid? i am FHA approved and so is the complex.

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Jonathan Dalton’s answer
It sounds like you're talking about the trustee's sale on the courthouse steps ... if you have the high bid, you have to provide a $10,000 cashier's check that is non-refundable. The remainder of the balance, as mentioned below, has to be paid in clear funds within 24 hours.

If you can find a financing vehicle that looks like cash and gives you the funds in a 24-hour timeframe, then you can finance. Traditional mortgages won't work. The primary reason for this is financed offers can fall through and when a house is sold at a trustee's sale, the trustee wants to make sure it's really sold without any contingencies so they can clear it off the books.
0 votes Thank Flag Link Wed Sep 16, 2009
If you can obtain private financing, you can finance the trustee sale purchase. To bid you will be required to show proof of $10,000 cashier's check made out to the trustee. The high bidder will be required to immediately deposit the $10K with the auctioneer and pay the remainder to the trustee by 5pm the next business day. This is where the private lender comes into play. Once you've paid the balance in full, and take ownership of the property, you can then start the refinance into a long term conventional loan.
0 votes Thank Flag Link Mon Dec 29, 2014
You have to pay cash for properties when you purchase them at the auction steps.
0 votes Thank Flag Link Sat Nov 8, 2014
If you really love your home and want to stay there, then these are your options:
1) Try to get the current owner to do a short sale on the home and continue renting until an agreement can be made (typical short sale time is 4 months, but heavily depends on listing agent and bank(s) and interest holders). I'd be happy to assist and work with the current owner if you choose this path.
2) Stay as a renter in your home, assuming your lease extends beyond the foreclosure time, then you can stay in your home and have your agent approach the bank or listing agent after foreclosure to purchase the home.
3) Typically the auctions are not the place to purchase the homes as they aren't sold for "fair market value" - they are typically sold for the "loss" the bank will incur and you certainly wouldn't want to pay over market for the home. In addtion, you'd need cash or a hard money loan to do this as the full amount is due within 24 hours of the auction.

However, if you're just thinking it would be "easy" because you don't have to move ... make sure you consider"
a) Is this the home you really want or are you just settling because it is easy not to have to move
b) If you haven't owned a home in the last 3 years - if you act now to find a home, then you may be eligibile for upto $8,000 in a tax refund if you close on your new home before 12/1/09. With a home that is just going into foreclosure, you'll most likely miss this cut off date and lose out on the tax credit (Congress may extend it, but it is an unknown risk at this time)
c) If you find a vacant, foreclosure home that you want - you may be eligible to get upto 22% of the purchase price paid by the state of Arizona if you qualify! This could get you into a conventional loan and you'd avoid paying mortage insurance. And you could buy a home that is higher in value than your debt:income ratios would otherwise allow as the 22% doesn't count against your debt. So if you thought you could afford $150K, you may be able to get something in the $180s for the same mortgage payment. :)

If you want any additional info, please feel free to contact me via email.

:) Patty Fisch
West USA Realty
0 votes Thank Flag Link Mon Sep 14, 2009
Rod and your real estate agent are straight shooters. Yes, you need to be a cash buyer to bid and purchase at the AZ Auction. Benito makes a good suggestion. It is a long shot, but may be worth a try.

The night before the auction, one can call the trustee (who typically points you to a website) to learn what the opening bid will be on a particular home. Not always, but in most cases, the opening bid will be the outstanding mortgage balance plus attorney fees.

If you need to finance a home, but you know a home well enough to purchase it on the open auction block (which can be risky), there are investors out there that will take on the risk of purchasing a home, in cash, for someone such as yourself, and then turn around and sell it back to that individual 3 months after it closes. Of course that investor will take a profit, but it allows you, the buyer, to ideally pick up a home for a great price and be able to finance that purchase. The financing would probably have to be 80% loan to value. And the investory for carrying the risk will collect a heafty deposit up front. So you still need to have some significant cash to make it all work.

That is probably more information that you wanted to know, but I wanted to reinforce the other answers and add a little bit more.

0 votes Thank Flag Link Mon Sep 14, 2009
Again, you must pay cash at the foreclosure sale. As Donald said, you will need $10,000 up front, the rest in cash within 24 hours. No financing. Your agent is not misleading you.

Benito makes a good suggestion. Have your Realtor talk to the current owner/landlord about a possible short sale offer. The bank may delay the foreclosure to consider this. If that doesn't work, then you may have a chance to buy the property if the bank takes it back at the foreclosure sale then puts it on the market as bank owned.
0 votes Thank Flag Link Mon Sep 14, 2009
Hi, if you just want to pay a mortgage instead of rent.

Have you talk to the landlord? Do you know if there is time to try a Short Sale? Have your agent talked to the landord?

You could not buy at the cour house because it needs to follow the rules. Besides, who will sign the Purchase agreement as a Seller? The sheriff? The mortgage Holder?

0 votes Thank Flag Link Mon Sep 14, 2009
well i am not sure if it's a REAL AUCTION. We received the notice of trustee's sale information from the county. it is listed online TS# AZ-09-306721-CL.

The original principal balance is $257,000 but the property couldn't be worth more than $140,000 today. (my non-expert opinion based on home searching in the neighborhood all summer) Will the minimum bid be the $257,000, then no one will bid, then it goes to open market?

My Realtor told me that i couldn't bid because i couldn't finance it, but i guess i just don't see why not? If i am pre-approved, why can't the bank allow me to purchase at the courthouse? i was thinking my Realtor wouldn't get commission if i went to the auction and that was why he was steering me away from it.

i don't want to move! i just want to own this place and pay a mortgage instead of rent.
0 votes Thank Flag Link Mon Sep 14, 2009
You need to verify with the Court, but I believe you need a $10,000 certified check (real cash) made out to yourself to bid and if you win the bid pay the balance in cash within 24 hours. No financing on trustee sale homes.

If you are talking about a REAL AUCTION where the property is listed, people can view it one or two weekends before it goes on auction to perform inspections, then I do believe you can finance those properties.

If the home is in foreclosure and going to auction then I don't believe you can.

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0 votes Thank Flag Link Mon Sep 14, 2009
No, you must pay cash at the foreclosure sale. Also, there are new laws that prevent you from being evicted after foreclosure. You should be able to stay until your current lease expires. Check the link below.
0 votes Thank Flag Link Mon Sep 14, 2009
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