Question Details

Hollie S, Home Buyer in Ohio

How do lenders bid on a property they foreclosed on at auction?

Asked by Hollie S, Ohio Fri Feb 20, 2009

I just found out a short sale property we've been waiting to hear back on for three months has been set up to go to auction in a week. (I found this by pure happenstance, no info from listing agent or anything.) We're thinking about bidding at the auction (we really want this house) and we have advantages in that we've walked through the property, we know exactly what's wrong, its condition, the disclosure form etc. If we do this, we'll also purchase a title search beforehand.

In ohio, the house is roughly appraised (usually under market value) and the lender does not open the bid, the bidding starts at 2/3rds the appraised value (In this case its $150/$100) We *may* be able to get it cheaper than our offer on short sale...BUT HOW FAR UP DOES THE LENDER BID?? The note was for about $137 (who knows what is now after fees). Will the lender not let the property go for less than what's owed on the note??

You guys are GREAT, thanks so much!!

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Answers

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Each transaction is different, it depends on the investor , mortgage insurnace and their guidelines. The most the lender will bid is up to full debt. The other issue that may be out their is if there are other liens that may be bidding on the property or investors. The only sure way to get the property in approved by lender is the short sale. If you really like the property I would suggest getting a buyers agent and submit a offer to the current owner.
0 votes Thank Flag Link Fri Feb 20, 2009
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