Home Buying in 98074>Question Details

Konak, Home Buyer in Sammamish, WA

How to buy a home in auction. What is the procedure?

Asked by Konak, Sammamish, WA Sun Mar 17, 2013

My brother gave me another Idea of buying home during home auction.

I am very new to this home buying thing and I don't know whats involved in it.

What needs to be considered during home auction?
What are the hidden points which we should not forget?
How difficult it is to get a home via auction?

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Answers

10
Jirius Isaac’s answer
Bad idea. You are up against people with millions of dollars that do this full time. You need cash & you buy sight unseen. Let one of us just help you find a good deal on a foreclosed or short sale home instead.. It is a lot safer.

Good luck to you in any case,
Jirius Isaac
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
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0 votes Thank Flag Link Sun Mar 17, 2013
What needs to be considered during home auction . . . .

I'll tell you, Konak - to my mind, the most important question to ask yourself on the courthouse steps is this: "how come all of these other smart savvy investors are letting me outbid them for this property?"

All the best,
1 vote Thank Flag Link Sun Mar 17, 2013
Typically the winner of the auction doesn't get the house. First the bank can still reject the highest auction bid. Plus redemption period. You buy the liabilities too, like the back taxes and HOA. Better to stick to bank owned REO's listed in your local MLS. Find an agent you like

if you like my answer, best answer, thumbs up me, thx!
1 vote Thank Flag Link Sun Mar 17, 2013
Thank you all for wonderful response. I am so amazed to see the kind of immediate response I got for a novice questions?

Really appreciate..
0 votes Thank Flag Link Mon Mar 18, 2013
Konak,
As you've likely gotten the impression here, we don't think a first time buyer should mess with an auction. Your brother has some good ideas, but unless they are active buying a home in this market, let me give you some advice. Find a great local Realtor to work with.
Learning all you need to learn to find the perfect house, make the right decisions regarding offering strategies, looking out for resale issues, learning everything there is to know about financing, inspections, escrow and title issues is too much for you to do on your own.
I don't know your understanding of what an agent/broker does for the buyer, but let me tell you, it's a lot more than a taxi driver and door opener.
As a first time buyer, a smart agent will see you as a buyer now, a referral source soon and a future seller and buyer. Your transaction represents multiples for a great agent who takes good care of you and helps you get a great deal on a home you'll love.
My consistent advice is to find a great agent, work with them, listen to them and learn you can trust them. Not all agents are great or trustworthy; I wish it were the case. So rather than put your energies into esoteric buying strategies find a great local agent and work with them to obtain your goals.
0 votes Thank Flag Link Sun Mar 17, 2013
I should also add there are also the auctions where the bank already owns the property, but has had a hard time selling it through a listing. Those are typically houses that can best be described as total pieces of feces, and the auctions are often with reserve, meaning the high bidder might not be allowed to buy. I do not recommend wasting your time with such a process.
0 votes Thank Flag Link Sun Mar 17, 2013
I recently wrote a blog piece on the risks of buying at a foreclosure sale:

http://www.trulia.com/blog/kary_l_krismer/2013/02/risks_of_b…

(Note there's an update to a recent example within that blog piece).

Tim is correct that there is generally no redemption period--assuming we're talking about a non-judicial foreclosure auction. There are exceptions, however such as the IRS possibly having redemption rights. If it is a judicial foreclosure auction, there may or may not be a redemption period, and the original owner of the property may get to live in the property during that redemption period.

This answer is not intended to be legal advice. To obtain legal advise a person would need to hire their own attorney and have that attorney review the facts of the specific property involved.
0 votes Thank Flag Link Sun Mar 17, 2013
Dear Konak,
To answer your questions there are too many considerations to cover in a blog. Buying at foreclosure auction is a very risky investment, and where experienced investors venture. If your not familiar with the many rules of due diligence you could lose your $ very quickly. The "hidden points" again are many and if you are only purchasing a home to occupy you need to work with an experienced foreclosure expert, there are several on the Eastside I could suggest. It is not difficult to find good deals at auction and If you wish to acquire good investments or multiple rentals you must educate yourself on how not to lose your life savings, a good place to start is join your local REAPS group http://www.reapsweb.com
Feel free to contact me for deeper discussion on foreclosures.
http://www.Laurietarantola.com
0 votes Thank Flag Link Sun Mar 17, 2013
John,
Sorry to say there is no redemption period in Washington State.
0 votes Thank Flag Link Sun Mar 17, 2013
Points? You need to do a lot of research on buying at a trustee sale at the courthouse to do it safely. It can be very risky!! You need cash, no loans and that is where points are involved. You will usually find the bank that has the loan will make an opening bid of what is owed or close to it, often no one bids more since the house is probably not worth what was owed. You need to know if there are 2nd trusts, liens, etc because if you win you will be buying these as well. The pros do a title search ahead of bidding to know. Often you get to the auction only to find out it was canceled or postponed. Often there can be 2 or more auctions going on at the same time too. It is not a place to learn on the job, good luck.

tim
0 votes Thank Flag Link Sun Mar 17, 2013
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