What does the term "trustee sale" mean-what should I be aware of as a buyer? Thank you!

Asked by Lisa, Santa Monica, CA Thu Oct 4, 2007

The property listing states "Trustee Sale-first time on the market in 20years..."

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Carl’s answer
Carl, , South Saint Paul, MN
Thu Oct 4, 2007
Trustee sale means that someone has been appointed to handle the sale of the home on someone else's behalf. This is very common when someone passes away. The term is also telling you that the home will most likely be sold AS-IS. This means that the seller does not have intimate knowledge of the home. The seller/trustee does not know if there is a leaky roof or how old the water heater is....those kinds of things.

Best wishes for your home search!

Best wishes for your home seach!
4 votes
Lidialia, Both Buyer And Seller, New York, NY
Mon May 30, 2016
A notice of trustee sale means the home will foreclose, unless the owner catches up on the missed payments, gets a loan modification, or short sales it.

There are several possibilities:
1. It could be available for sale, likely a short sale, right now. A local realtor can answer that question for you. If it is, you can make an offer on it, and it will likely require bank approval in addition to the seller's acceptance.

2. It may end up going to auction. Foreclosure auctions are public, you could bid on it there. However, you will need to pay cash for the home, and will have no inspections or warranties.

3. Likely if it goes to foreclosure auction, the bank gets it back. Then they will list it for sale as a bank owned/REO home, with a local realtor. Then, you can buy it without the legendery problems many short sales are.

Neither the designated trustee nor the mortgage holder can sell you the home - http://ForeclosureProcess.net
4 votes
Ute Ferdig, Agent, Auburn, CA
Thu Oct 4, 2007
The trustee sale is the event that concludes the foreclosure process. In states that have deeds of trusts as opposed to mortgages, the trustee is named in the deed of trust, which is the document that the borrower sign in addition to the loan documents. When a borrower falls behind with payments the lender can initiate foreclosure procedures by recording a notice of default. If the borrower does not cure the default after the notice of default, then a date for a trustee sale is set. The trustee will set a minimum bid for the trustee sale and if nobody bids, the property goes back to the lender.

When you buy at a trustee sale you have to understand that you'll need a cashier's check for the deposit. You'll also not receive any disclosures as the trustee and/or bank never lived in the house that is being sold. You'll also have to find out whether it is ther first or second lender that forecloses. Many times, when you see a low minimum bid, you'll know that it's most likely not the first that is foreclosing. If it's the second, you are bidding on a property that will still have the first loan in place after the trustee sale. You'll also want to make sure that there are no IRS tax liens as the IRS has the right to reinstate the tax lien after the trustee sale. You can see, unless you do your homework, you may end up with a property that still has liens in place. With a property that was owned for 20 years by the same owner, I'd be suspicious as there is a good chance that the owner may have fallen into the home equity line of credit trap and that it is a second lien holder that is foreclosing. I hope this helps.
Web Reference:  http://www.go2kw.com
2 votes
Thank you so much for this clarifying post!! Very helpful!!
Flag Tue Oct 27, 2015
PLEASE, write me at name222@msn.com or call me at 614-531-0100
I do have a question regarding Trustee sale.
VERY VERY good information you have provided here. Thank you.
Flag Mon May 13, 2013
Wisepup1, Home Buyer, Pacific Palisades, CA
Wed Mar 29, 2017
I live on property that is up for a trusty sale does this mean I will lose my home
0 votes
Homey, , Highland, CA
Mon Nov 29, 2010
Hi! When you attend a trustee sale...the lender is auctioning the house to the highest bidder. For example:
there may be only 3 people there bidding...sometimes ONLY YOU!! That means you will get the home for pennies on the dollar!! The home was probably only JUST RECENTLY reposessed by the bank...previously having been owned for 20 years by the former occupants. Trustee sales ARE a good way to obtain a home you like. You don't need to be aware of anything, as the trustee sales have had all repairs made, things fixed and documentation for all that.
0 votes
Sonia, Home Seller, Hayward, CA
Fri Mar 13, 2009
Can I still put my house for a short sale if I already received a notice of trustee's sale
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Sep 10, 2008
Good Afternoon Lisa,

A TRUSTEE is someoen who is taking care of the "trust" whoch owns the property, now it does not have to be a foreclosure, it can be but they usually dont list it that way. It could be an estate sale or an investor who has appointed a trustee to sell off a property. It is a way to garner onterest. The import thing is you should pay attention to the terms they are asking, is it sold as is, will they allow a mortgage contingincy, will they allow a home inspection, how much of a deposit are they asking for a down payment and how long will they gove you to close. Good luck
Web Reference:  http://www.ScottSellsNH.com
0 votes
Jonathan Tay…, , Orange County, CA
Wed Sep 10, 2008
Yes, it means it's being sold by the holder of the note
Click here for all Forclosures
0 votes
Jim Walker, Agent, Carmichael, CA
Thu Oct 4, 2007
There are many different kinds of trustees - 1.Bankruptcy trustees sell a living persons estate to collect on behalf of the creditors. // 2. A probate trustee sells the property of a deceased person to distribute the estate to heirs and creditors (if any) 3. Very common today are foreclosure trustees that sell a house pledged by a mortgagor (trustor) to a lender. (Ute's answer and Perry's answer)

Mansur and Carls answers are correct in all 3 situations.
0 votes
Perry Hender…, Agent, Austin, TX
Thu Oct 4, 2007
In other words.... This house was foreclosed upon from an owner who owned it for 20 years. The bank has hired a professional to sell it.
0 votes
Can a husband do a trustee sale if hi wife is on the deed and they are separate
Flag Fri Apr 21, 2017
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