Laura's correct, at auction and all CASH. You know how they say you won't want to eat sausage once you see how it's made....
Foreclosure Auction Guide
"Wells Fargo auctions off house they don't own"
Still intetested? Really? OK....
There are two types Auctions:
1) Trustee Sale â€“ When a lender/servicer goes through the process of a non-judicial foreclosure the last step is the Trustee Sale on the County Courthouse steps. The amounts of seasoned investors at these events far outweigh the number of â€œnewbies.â€ If you are looking for actual Trusteeâ€™s Sale auctions, they are published in the newspaper on a weekly basis under â€œpublic notices.â€ Notices are also typically posted at the entrance of the County Courthouse.
Here are a few things other points to consider:
-You will have no professional representation during the purchase.
-You will have no escrow, or title report/insurance. Therefore, you have no assurance there are no other "hidden" liens/loans on the property.
-"Loans" need not apply; California state law requires liquid funds when your bid is accepted. The Trustee accepts cash or cashierâ€™s checks (and nothing else). Most who do this on an ongoing basis will go to the auction with several denominations of cashierâ€™s checks up to the amount they are willing to pay for the property(s) of interest. Any cashier's check overage will be returned to you at a later time.
-You will be responsible for removing any occupants, who may not be the previous owners. Tenants who are sued for eviction may retaliate in the most property-destructive ways.
-You will have NO professional inspections before you buy. Forget about any disclosures from the seller as to the condition of the home or neighborhood.
2) Auction Company â€“ Each auction company will have their individual process posted on their website to tell you about deposit requirements and how to view the homes (i.e. http://www.williamsauction.com ). You have to have a Cashierâ€™s check for deposit at a public auction. Seasoned bidders will have multiple Cashierâ€™s checks of different denominations to make up a particular bid of a home. These auctions allow the bank(s) to unload lots of properties faster in this "bid-up" environment. It's really more of a pressure sales environment based on the premise that pitting fairly unskilled buyers against each other results in higher selling prices for the sellers. Have a drop-dead figure for each property you bid on and once you reach it â€œwalk away.â€ Although you do get some time to do inspections, this is really a process for someone who is intimate with eyeing defects and has some level of construction experience allowing them to walk into a house and know what it will cost to place it back into shape.
From a highest-to-lowest risk scale you have:
1) Trustee Sale,
2) Auction Company Sale,
3) REO (reduced disclosure requirements),
4) Short Sale (primarily risk is approval timeline), and
5) Non-Distressed Sale.
Be aware though you will probably being going up experienced investors. You purchase "as is" and if there is any tax liens they become your problem.