Foreclosure in 94404>Question Details

Goff, Home Buyer in Foster City, CA

what do i need to watch out for when buying a forclosure at auction?

Asked by Goff, Foster City, CA Thu Aug 14, 2008

Help the community by answering this question:

Answers

8
If you have no knowledge of foreclosure sales, and If you do not know what you are doing, please do not try to buy on the courthouse steps.

Why? Because you can get burned badly. Within the past 2 months, investors who are pros have been burned becasue of a new game with home equities line of credits. I don't have time to go into it, but it's not for everyone.

If you are looking for a deal, and who isn't, try buying an REO. That's a property that has been taken into inventory by the bank after it was either not sold at the court house or as a short sale.

Buying an REO is much safer, you get to see what your are buying, and your have protection.

Dave Tapper
Web Reference: http://Teamtapper.com
1 vote Thank Flag Link Thu Oct 2, 2008
There are different kinds of foreclosure auctions though. From my RE education, I understand that tax deed auctions will pay the prop tax, mortgages and more junior liens from the proceeds, and any liens left unpaid will be wiped out. But they don't give you clean title. It's still your own responsibility to pay a lawyer to make it clean for a small fee. For other auctions, if they promise you clean title, then it's supposed to be free from liens, but then you never know if something lurks around. With any auction, there is a risk of liens if the foreclosure was not done properly in the legal sense, or if there are foreclosure-specific loopholes favoring the seller.
0 votes Thank Flag Link Sat Oct 4, 2008
First do your homework, you need to do a titkle search to know if there are any leins or back taxes so as well check with town hall to see if there are any back taxes or fines against the property. at auction you are responsible for all back taxes, 2nd mnortagges, hoa fees or mechanics leins, so you need to make sure you know for sure before bidding. last is to do any inspections before bidding, it is sold as is and you wont be able to back out if you win. good luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Oct 4, 2008
In just about every case; you would be buying the property "as-is" that is the easiest part to remedy. Other liens MAY still encumber the property as well. It seems that most real buyers will go the route of a bank owned property or short-sale. In all of the above cases- investigation, time and patience are required.
0 votes Thank Flag Link Sat Oct 4, 2008
I agree with David. I've experienced buying REO's, Short sales, regulars and even at an auction (in a hall, not courthouse steps, which would be worse.) With auction, the problem is you have no contingency protection after winning the bid. Due diligence includes inspecting the property, bring a home inspector with you if you can, search their records, including property tax owed (available online) and other liens (will have to go to courthouse or pay for title search). what I find most difficult is getting HOA info, because it's not public and many HOA's won't tell you if you are not a member. And these can involve pet restrictions, rental restrictions, age requirements (senior parks), and special assessments that can be thousands of dollars and anything else that just came up recently. But in a regular or REO sale, you get the documents during escrow and can back out if you don't approve.
If you are not a pro, I discourage auctions. But if you like the fun of it, just go view some homes, and go to the auction and watch how people bid. I saw someone overbid on a totally run-down property that I had viewed but he probably didn't, and the one picture shown on the screen looked really good.
0 votes Thank Flag Link Sat Oct 4, 2008
Goff,

In most cases, if the property is still occupied, you may end up with the honor of dislodging the occupants which can involve a lot of time, energy, and money.

good luck
0 votes Thank Flag Link Fri Oct 3, 2008
My answer would be the same as Jim's. Buying a house at an auction is buyer beware and most often purchasing sight unseen. Definitely check the home out prior to bidding to ensure you are not purchasing a house that is completely gutted and needs a major overhaul. Good luck and happy bidding!
Web Reference: http://www.MVE2DAY.com
0 votes Thank Flag Link Thu Aug 14, 2008
The first, and maybe most important thing is to actually go see the house inside and out first. It's not uncommon for the unfortunate foreclosed upon former homeowners to have done some serious damage to the house on the way out. I've heard many stories of people buying homes at auction more or less sight unseen because they thought it was a good deal and were later surprised to find the house needed alot more work than they had anticipated. Do your due diligence before the bidding begins.
Web Reference: http://fostercityblog.com
0 votes Thank Flag Link Thu Aug 14, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer