Went To My First Auction Today
Hello, my wife and I are newbies. We are excited about digging in to the foreclosure biz. We have an investor and we are ready to go. We have much to learn, but I thought i would go to my first auction today. Just for observation, so I had no money with me or little knowledge of the house. I did find it and it was a real junker. So I thought it would go for 30,000. So when I got to th court house, it was empty except for one man standing in the corner. Turns out I was the only one that showed up. He was the trustee, the substitue trustee, and the auctioneer. This guy is the one i triedt to call for days about the payoff amount. He said he is too busy at auctions to return calls,hmmm? I introduced myself as an investor, for the area, and I wanted to learn more form him. He was really mean, and not very informative. After talking for a few nervous minutes , I brought up the fact that I fly and he instantly became very interested and we talked for a half hour. No one showed up and the auction never happened. He told me the payoff amount was 90,000. Which I was then glad I didnt have any money with me. Is this the minimum price it would have sold for?? Could I have bought for cheaper?? So now the bank will buy it back from him, and he still gets paid for showing up he said. Does he make anything off the sale if it did sell? Is it the "higher the better for him?" Also what if they never get back to you on the payoff amount? How else can you get this number? What about the bank now, can i buy it from them at super reduced price?? Sorry to ramble, but everyday bells are going off in my head and I have 100 new questions for every one thing I do. Also, lets say I really wanted that place, and I got it for my price, and I was the only one that showed up, would i have been the winner at 90,000?? HMmm, i appreciate all the help!!!
The bank's (lender's) bid is likely to be the payoff amount since they are looking to be made whole at the sale. If no one comes up with a higher bid, the bank will own the property (REO-- Real Estate Owned by bank). You can likely buy it from the bank at a lower price. If you get a chance to make an offer, get a contractor and property inspector to determine what additional repairs and associated costs you will be facing. Your offer should be contingent on these.
Hope this helps.
Lots of questions. I will try to help. The dude was probably an attorney or an employee for the attorneys office and only getting a $700 to foreclose on the property. There is no commission that I know of. Here in Austin there are a lot more bidders with almost a 1000 properties per month getting sold. Since there were no other bidders the bank will get a deed from the trustee to the bank. You may be able to buy it at a discount below the $90,000. That depents on several things. If it is a VA or HUD insured loan the property could be deeded over to them or another PMI company if they were the insurance providers. The bank could also sell it for their investor if it is being serviced by the bank. There are other scenerios too. If you had wanted the property and had the cash or cashiers check you could have gotten a deed on the spot and gone and recorded it and been the owner. Always have a title search done prior to spending money at a sale like this. There are some judgements , leins, taxes, etc that you may have to pay in addition to the sales price. Also the trustee and the bank will not give out payoff information. New privacy laws will not allow that information to be given out except to a certain few, title companies, debtor, courts, etc. Most are even hard to get info from even if it is your loan. To get info from bank you will need permission in writing from debtor. Sometimes you can get from online site if you know ss# and name and address and wife maiden name etal. PM me if I can help more.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
Thank you so much for your responses so fast wow. I really love this site.
Well The trustee that was running the auction told me the pay off amount. Is this not legal, or right, I mean how else would you know to persue the prop if you didnt get all the numbers? Another words how would I know If the prop was even profitable without this information?
So would this mean I have to pay a title company to do a title search everytime I find a foreclosure, to find out the payoff amount, and then see if there are any leins?I am sorry I hope I am not asking dumb questions?I have learned tons of info in a very short time(2weeks). My investor is also my mentor/hero. He has been doing rei for a long time. But he lives pretty far away. I just thought I would do some digging on my own