Home Buying in Brentwood>Question Details

info, Home Buyer in Brentwood, TN

How difficult and laborious is it to do the online auction-bidding when the house is a forclosure...cash only situation?? Any experience?

Asked by info, Brentwood, TN Mon Apr 15, 2013

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This question was asked from this property: http://www.trulia.com/property/3034993913-1016-Sunset-Rd-Bre…

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Prentiss Holt’s answer
Foreclosure bidding is a pretty tricky scenario; and I definitely recommend going in person. Pretty much all foreclosures are a cash-only situation, and since you are required to pay at the end of bidding, it's absolutely worth your time to go ahead and be there in person.

That said, foreclosure homes are a bit of a rough sell. In many cases, the homes have had no maintenance done on them all throughout default, and in some cases, the original owners are still living in them and need to be formally evicted, or it can take months for you to actually get the title in hand. Unless you are an experienced flipper or contractor, I would recommend going with a short sale or REO property instead: it may be more money upfront, but you'll spend less on repairs and headaches after the fact.

Check out my blog on the different types of low-cost foreclosure-type home buying situations:
http://www.nashvillespropertysearch.com/blog/common-terms-ex…
0 votes Thank Flag Link Wed Apr 17, 2013
thanks for all of the advice! Helps a lot....
1 vote Thank Flag Link Sat Apr 20, 2013
Beware, you need to do your research. You may be bidding on the lien and may not have clear title.
Property is being offered as is, where is
• Buyer is responsible for all costs associated with purchase
• Buyer will receive a Quit Claim Deed
• NO TITLE INSURANCE OFFERED AT CLOSING
1 vote Thank Flag Link Sat Apr 20, 2013
this is a great dialog exchange this beautiful Monday morning!! I'm learning a ton!! I received the below email....and I suppose this is step one for me this morning..



We suggest that you come in personally. You will start in the Property Assessor's office. You can obtain the owner's name and deed reference there. Then you can come into our office and you can look up the history on the property. It is public record. We are located in the Administrative Complex at 1320 West Main Street, Ste 201, Franklin TN 37064. The Assessor's office is on the 3rd floor. (One floor above us). Thank you,


Register of Deeds Office
Williamson County
0 votes Thank Flag Link Mon Apr 15, 2013
Where are you seeing this particular property is for sale? It foreclosed already - I have done some of the leg work for you (because I do this a lot I pay to subscribe to the Williamson County Register of Deeds).
Flag Mon Apr 15, 2013
Sorry, Simon you are right I was referring to a short sale. I was not including auction properties in my remarks as yes they are cash and yes you do need to do your own research. However, with listed properties you do not need to put your cash up at the time of the offer but at closing.
0 votes Thank Flag Link Mon Apr 15, 2013
Linda,

With all due respect you are wrong - if the first mortgage forecloses junior lienholders are invalidated. I use the term junior becasue even though taxes come AFTER the foreclosing deed of trust they are NOT junior lien holders.

I speak from experience of buying foreclosures on the court house steps right here in Williamson County, TN.

Your answer is mroe reflective of what MIGHT happen in a short sale where a junior lienholder can refuse an amount they are offered "short".

When buying AT the foreclosure auction there is no financing, no title insurance, no warrantability, no inspections - zero - it is very much buyer beware and yes they want your cash straight away.

SImon
615 579-7909
0 votes Thank Flag Link Mon Apr 15, 2013
it is not true that a junior lien holder does not matter, infact they can hold up the entire transaction if they refuse the amount they are offered. As to taxes & liens your title company will research that for you, that is their job to make sure you get clear title. Banks & government owned properties use specific title companies that are experienced in this type of property. You want to be sure and purchase title insurance to protect yourself. Also if you are offering cash you do not have to put that up immediately, you just need to supply proof that you have the cash.
0 votes Thank Flag Link Mon Apr 15, 2013
thanks everyone...Mike...you've been to this house??
L
0 votes Thank Flag Link Mon Apr 15, 2013
These online auctions many times will only take bids form a registered real estate agent. Connect with the agent that has done some online bidding and has experience. I have doen so on this site and also on HUDhomestore.com.

The price listed is the starting bid, there will most likely be a reserve price set at fair market value for the distressed properties.

There is a 5% buyers premium so add that amount in cash also to your high bid. States occupied but I have seen this same site be in error on that before.

All the best!


Mike Grumbles
EXIT REALTY OF THE SOUTH
0 votes Thank Flag Link Mon Apr 15, 2013
Just as a quick follow up - I'm not sure where you are seeing this property as available - I just checked the register of deeds and it foreclosed 3/12/2013 and returned to the lender for $449,178.54.

BEWARE - there is a second lien that *might* be trying to foreclose after the fact - it won't happen (just my $0.02 of an opinion).
0 votes Thank Flag Link Mon Apr 15, 2013
Scott has hit some of the high points on the head. Please note that I am not an attorney and cannot offer legal advice but it is my experience and understanding that any back property taxes will still be due but any and all other JUNIOR liens will no longer be valid.

That's a big one - is the first mortgage foreclosing?

Additionally is there a federal tax lien - these don't go away either.

You will benefit by conducting a full title search at the register of deeds for this property.

Finally - cash means cash - you'll be expected to submit 100% of the winning bid within hours of winning the auction - NOT time to line up financing.

Good luck,
Simon
615 579-7909
0 votes Thank Flag Link Mon Apr 15, 2013
It is not difficult but does require you to learn and understand how the auction works. Find out of the bidder is responsible for any back taxes, HOA fees or liens? Find out if the home is occupied and if the high bidder will have to evict the occupant. You then need to assess what the home is worth and deduct for liens, evictions and the risk of not seeing what damage could exist in the interior
0 votes Thank Flag Link Mon Apr 15, 2013
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