Shopper, Home Buyer in Fort Lauderdale, FL

Properties that are listed as Foreclosure (Auction) or (Bank Owned)

Asked by Shopper, Fort Lauderdale, FL Tue Jan 11, 2011

New at r.e., so I want to be sure of an issue. When property is listed at a low price, say 5,100 and it says Foreclosure (Auction) or (Bank Owned) what does that mean? How do you determine the real price, does that mean there might be all kinds of taxes, etc. owed on the property, who do you contact? If it is an Auction property, how do you bid? Thank you.

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4
Shopper,

Foreclosure is simply the process that transpires when a property owner no longer wishes to, or is not able to, meet their financial obligations on the property. The initial start of the process is when a public notice of default is filed which can be when a owner is late on their payments by 90 days or more. This in known as pre-foreclosure and when you see a short sale listing this is where they are in the process. The end of the process is the foreclosure sale, or auction, which is handled on the county level. While anyone is able to participate in these auctions, more often that not, the bank is there to protect their interest and leaves with the ownership to the property. At the foreclosure sale all junior liens are wiped out so it is imperative you know who is foreclosing and where they stand in the line of creditors. The entire process can be very lengthy and confusing. Further, if you are bidding at these auctions you must have 100% of the purchase price in cash. It is very, very important that you do your homework on auctions or you have a very good chance of making a losing bet.

You are not going to find a home in Florida for $5,100 but you can find plenty of condominiums if you add another couple grand but you truly are getting what you are paying for in most cases. What you are probably seeing online notice of a foreclosure notice or the bid price of a lender protecting their asset at a foreclosure auction. Unfortunately, there is a lot of mis-information out there on the internet.

This is a tremendous time to be buying in Florida depending on the type of property you are interested in. If you have any interest in Palm Beach or Martin Counties I would be very happy to speak with you in greater details about your goals and see what I can do to be of further assistance, so please feel free to contact me at your convenience. I also have some great colleagues in Lauderdale so if you would like a referral just let met know.


Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference: http://www.tompriester.com
1 vote Thank Flag Link Wed Jan 12, 2011
"When property is listed at a low price, say 5,100 and it says Foreclosure (Auction) or (Bank Owned) what does that mean?"

It could mean anything. Some banks will price their listings at low prices, because those properties need a lot of work. Some banks will price their listings at low prices hoping to trigger bidding wars. Some banks will price their listings at low prices, because they don't know any better (this doesn't happen often--but it does happen). Some banks will price their listings at low prices, because they have a lot of distressed properties that they need to move in that neighborhood. And the list goes on. . . .

The point is that you need to do your own due diligence to determine what you think the property is worth, and then make your offer based on the price that you determined.
0 votes Thank Flag Link Sat Jan 22, 2011
This type of purchase does require "background work", its important to know your property, then know what similar or "comparable" properties have actually "SOLD" for, because the banks are going to want to get as much as they can, and you cant blame them. Its best to obtain several target properties because right now almost everybody is trying to get them, there is alot of competition, in some cases i have put in an offer and there were "NO KIDDING" 42 other offers for ONE property, sharpen your pencil and hound the closed sales statistics! Then when you are confident of your bid amounts look at the property IN PERSON, and come in with a strong offer!
0 votes Thank Flag Link Sat Jan 22, 2011
For the most part as it relates to an auction, there are websites such as auction.com that you can purchase properties thru. They usually have a starting bid price, but they also have a reserve price in mind. You can usually get an idea of what that price might be by finding what the property was or is listed for in your local MLS. There will be closing costs and depending upon your financing type a down payment. The auction company will probably expect a 5% or so down payment as well as a buyers premium of 5%. Auction.com has a lot of info on there to explain the process in more detail.
Web Reference: http://www.auction.com/
0 votes Thank Flag Link Tue Jan 11, 2011
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