Julie - If you have any questions about foreclosures, feel free to call me 770-713-4278. I live in Athens and I specialize in foreclosures in short sales. The answers you see below are accurate. The bank starts bidding at the loan payoff. You also must bring cash equivalent to the courthouse steps to purchase a home and there are many reasons it's not a good idea to start at the courthouse steps. I would be happy to elaborate for you.
The objective is to cover the outstanding balance, opening bids are usually that figure. If a buyer jumps, they will usually take the deal - best case is a bidding war on the steps that drives the price up. Reality is that most homes are over mortgaged so the lender ends up taking it back, cleans it up and lists it for sale with an agent. Part of the prep is routine maintenance and an appraisal so the lender has an idea of current market value.
I'm a broker and a FNMA appraiser - my role is to eyeball and provide an opinion of market value for lenders when they get ready to list these homes.
Hi Julie~ The opening bid for the property on the courthouse steps is for the current payoff of the mortgage (plus attorney fees) and it is made by the attorney representing the bank. If no one makes a higher bid then the property goes back to the bank.
Sure- banks are very greedy- they want all they can get- but in some cases they will take a little less- they all have a threshold where they will not go below- that falls between a short sale price and foreclsoure- if the market is still in decline as a trend then they will take more- but if its in good condition and does not require much work they will hold it-
I believe that to be the case. The court house steps is where the trustee for the bank, makes a "last ditch effort" to get the Investor, for the loan, what is owed on the loan. That is why, more times than not, the home goes back to the bank. After the trustee sale, when the bank list the home for sale, the asking price will be somewhere around fair market value.