How much do you know about this property, other than the fact that it is listed for auction? Are you aware there are 3 mortgages against the home? Do you know if you buy the house at auction, you would be taking it subject to a $2.5 million 1st TD, at the very least and possibly other liabilities that are senior to the foreclosing lien? Do you know how many payments have been missed on the 1st TD? What about unpaid property taxes to the tune of over $35K? And are you aware that there was a recent recorded transfer, which might create a cloud on title?
These are things you need to know before you show up at the Trustee Auction and pay cash for a home. Trustee Auctions are not a place for the average homebuyer. The people who buy properties on the courthouse steps are sophisticated investors who have access to a lot of information the average home buyer does not. And even for them, sometimes they lose big on a single property. They play the numbers game and if they win more than they lose, they make a profit overall.
Lastly, there is a reason the auction date has been postponed (in this case the records indicate that the reason for postponement is Bankruptcy). Chances are, it will be postponed again. Understanding the various reasons banks postpone auction dates is another critical step to success in buying a home at the foreclosure sale. Without this knowledge, you might end up on the courthouse steps with a ton of $$$$ in cash or cashier's checks and nothing to buy.
If you have cash to buy a home, then you need to work with an experienced Realtor, who can help you find and negotiate a great deal from a motivated seller. However, if you are only looking to buy $3.0 million homes if you can get them for $725,000, then you might have to stand in line with lots of other buyers, who unfortunately will bid against you and push the price right back up to some reasonable approximation of Fair Market Value. And in this case, if you bought this home on the courthouse steps for the published bid of $726,055, you would end up paying well over $3.261 million for the house. Not such a great deal after all.
Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty