Home Buying in Napa>Question Details

Philip Liang, Home Buyer in Palo Alto, CA

What is the procedure for buying a home off a mortgage foreclosure auction?

Asked by Philip Liang, Palo Alto, CA Mon Mar 25, 2013

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Yes, to answer your question, call up the auction company to find out the rules.

Keep in mind you buy these homes AS IS.
0 votes Thank Flag Link Fri Jun 7, 2013
Philip,

Kris is exactly correct.... the common error is that a potential Buyer can just show
up on the Courthouse steps with the cash.. Not so. Most if not all companies that
run the auctions will not accept cash...

And the most important message in his Kris's comments is with regard to the caution
regarding the "caveat emptor" - Buyer Beware - the condition of the home and therefore
a very critical factor in determining the value is unknown... and there is no recourse for
the Buyer regardless of condition.

As with any real estate transaction, the average Buyer should enlist the assistance of
a real estate professional - Agent or Broker - in making the purchase of a foreclosure
at auction.

Good luck.

Charlie Laughlin
0 votes Thank Flag Link Tue Mar 26, 2013
Philip,

The process is relatively simple. But it is not just showing up with Cash. In fact you can't show up with cash. You will arrive the day of the auction with a cashier's check made payable to yourself. You then need to register with the auction so that they know what your "maximum bid" will be.

After all the participants have registered the announcements of the properties auctioned will be made and then in about 30 minutes the auction begins.

BUT here are the major issues with buying at auction. Basically it is buyer be ware.
Here is the legal notice provided by a Recontrust for potential buyers:
"NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee auction. You will be bidding on a lien, not on the property itself. Placing the highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property. You are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on this property by contacting the county recorder's office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property. "

If you have any further questions please let me know.

-Kris
0 votes Thank Flag Link Tue Mar 26, 2013
And remember that you will be purchasing a home sight unseen, basically. There is NO opportunity to inspect the inside of the property prior to the auction. You never know what you will find inside, it could be beautiful or it could be a mess. So, make your offer based on a worst case scenario.
0 votes Thank Flag Link Tue Mar 26, 2013
You go to the county steps and pay all cash on the spot.
0 votes Thank Flag Link Mon Mar 25, 2013
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