Buying a house at Auction - Advice Needed

First, auctions are almost always delayed so who knows when it might actually come up for auction. 2, check to see if there are any liens on the property, how much in back property taxes are owed, etc. You may be responsible for some/none/all of these.

When buying in an auction, you need to typically pay cash. Also, make sure to have plenty of funds sitting around for renovations, etc if the house has issues that are discovered after purchasing.

Auctions are not almost always delayed. Does it happen, yes, but it really depends on the area you are in. In my area roughly 30% get delayed/pulled.

Like tennis said, you are responsible for any back property taxes and some liens (depends on your state/county). Check the recorder's office, auditors and if you are really interested it is not a bad idea to get a title check or a real estate attorney.

The process is different for what area you are in so check your sheriff's website. In my area, at the time of auction the winning bidder needs 10% of the purchase price but not greater than $10k in either cash or cashier's check, plus a certain % of the price in fees. The remainder needs to be paid within 30 days so you CAN get a mortgage after that but it will be tough due to the timing.

Once you get the keys, which isn't immediately, its anyone's guess on what is in the inside and you are stuck with whatever you get. Did the people before rip out all the pipes, tear the place up its possible so you may need that extra cash to get the property up to code.

read the rules for your area and if you are really interested, I would hire that attorney. There is a chance that the property will be pulled and i would attend an auction before the property goes up, just to get a feel of what happens.

One thing I would recommend is to look into the foreclosure laws in your state, particularly in regards to rights of redemption. If the area is as nice as you say, and as tough to get into, it just wouldn't do to buy it at auction and have the original owner buy it back six months later. A good place you can start is at http://www.foreclosurelaw.org/, but also look into the state statutes/hire an attorney who deals with properties/investments.

Quote from SCDoGo : One thing I would recommend is to look into the foreclosure laws in your state, particularly in regards to rights of redemption. If the area is as nice as you say, and as tough to get into, it just wouldn't do to buy it at auction and have the original owner buy it back six months later. A good place you can start is at http://www.foreclosurelaw.org/, but also look into the state statutes/hire an attorney who deals with properties/investments.

I took a look at the website you provided. It showed me that the owner has 10 days to redeem the home after the foreclosure sale has completed. Good to know!

Quote from discostu58 : Auctions are not almost always delayed. Does it happen, yes, but it really depends on the area you are in. In my area roughly 30% get delayed/pulled. Like tennis said, you are responsible for any back property taxes and some liens (depends on your state/county). Check the recorder's office, auditors and if you are really interested it is not a bad idea to get a title check or a real estate attorney. The process is different for what area you are in so check your sheriff's website. In my area, at the time of auction the winning bidder needs 10% of the purchase price but not greater than $10k in either cash or cashier's check, plus a certain % of the price in fees. The remainder needs to be paid within 30 days so you CAN get a mortgage after that but it will be tough due to the timing. Once you get the keys, which isn't immediately, its anyone's guess on what is in the inside and you are stuck with whatever you get. Did the people before rip out all the pipes, tear the place up its possible so you may need that extra cash to get the property up to code. read the rules for your area and if you are really interested, I would hire that attorney. There is a chance that the property will be pulled and i would attend an auction before the property goes up, just to get a feel of what happens.

Hey - So I've been following this property for awhile, it was delayed once back in November. Now it's back on the auction block. And you're right, I'm required to have 20% available the day of and the remainder needs to be paid within 30 days. I'm having a friend do a title check and am planning to consult with a real estate attorney next week as we get closer. Thanks for the advice!

Let's say he goes to self inspect the property and a door or window happens to be unlocked. Would it be illegal for OP to enter the property and check it out for damages before the auction?

Quote from GeTinThere007 : Let's say he goes to self inspect the property and a door or window happens to be unlocked. Would it be illegal for OP to enter the property and check it out for damages before the auction?

Yes, but he would only get into trouble if got caught

Quote from nik929 : Hey - So I've been following this property for awhile, it was delayed once back in November. Now it's back on the auction block. And you're right, I'm required to have 20% available the day of and the remainder needs to be paid within 30 days. I'm having a friend do a title check and am planning to consult with a real estate attorney next week as we get closer. Thanks for the advice!

Your friend better be damn accurate with his lien and GI search.

Here is a few things to look for.

Is the owner / tenant still living there? If so, be prepare to offer cash 4 keys or go through the eviction process with a real estate attorney.

If the homeowner is savvy, he will do several strategic BK after the sale right around eviction time to buy him more time to live there for free.

If there is a federal tax lien attached, it will take at least 6 months to get removed. It will follow the owner, but the process takes forever to get it removed.

HOA in the development? They will try to bully you into paying any delinquent HOA fees from the previous owners.

Quote from GeTinThere007 : Let's say he goes to self inspect the property and a door or window happens to be unlocked. Would it be illegal for OP to enter the property and check it out for damages before the auction?

As far as "self-inspections" go, in my area it is only trespassing on the property if a sign is posted or the owner takes "sufficient steps" to secure entrance, ie a latching gate. If a gate happens to be open, you can walk around the premises and peek in the windows and such (make sure it is empty). If the door is already open, you can enter, but not if the dwelling is secured. Be sure to check your own local laws. I know people who would call an unlocked window an unsecured property and look around inside . . . I'm not quite that bold.

Whenever I do something like this I make sure to dress up to around business casual (brown shoes, khaki slack, collared shirt) and carry a clipboard with me to take notes and take pictures. Any nosy neighbors will assume you are there with some sort of official business and generally leave you alone/not call any cops on the "suspicious trespasser". I've never had the cops called on me, but I know some who have. Just don't do anything stupid and you will generally just be told to be on your way.

Quote from samurai03 : Your friend better be damn accurate with his lien and GI search. Here is a few things to look for. Is the owner / tenant still living there? If so, be prepare to offer cash 4 keys or go through the eviction process with a real estate attorney. If the homeowner is savvy, he will do several strategic BK after the sale right around eviction time to buy him more time to live there for free. If there is a federal tax lien attached, it will take at least 6 months to get removed. It will follow the owner, but the process takes forever to get it removed. HOA in the development? They will try to bully you into paying any delinquent HOA fees from the previous owners.

Thanks for the advice. It looks like there aren't any liens. Only the current mortgage outstanding. What's "GI" ? And "Bk"?. I'm planning to go to my local town office this coming week to check for myself for any other liens or any information I can find. Would a federal tax lien be recorded there?

Would they mention that a home has liens at the auction? In case I miss something.

Quote from SCDoGo : As far as "self-inspections" go, in my area it is only trespassing on the property if a sign is posted or the owner takes "sufficient steps" to secure entrance, ie a latching gate. If a gate happens to be open, you can walk around the premises and peek in the windows and such (make sure it is empty). If the door is already open, you can enter, but not if the dwelling is secured. Be sure to check your own local laws. I know people who would call an unlocked window an unsecured property and look around inside . . . I'm not quite that bold. Whenever I do something like this I make sure to dress up to around business casual (brown shoes, khaki slack, collared shirt) and carry a clipboard with me to take notes and take pictures. Any nosy neighbors will assume you are there with some sort of official business and generally leave you alone/not call any cops on the "suspicious trespasser". I've never had the cops called on me, but I know some who have. Just don't do anything stupid and you will generally just be told to be on your way.

Thanks for that tip. I'll make sure to look good. Planning on walking by this weekend.

Quote from nik929 : Thanks for the advice. It looks like there aren't any liens. Only the current mortgage outstanding. What's "GI" ? And "Bk"?. I'm planning to go to my local town office this coming week to check for myself for any other liens or any information I can find. Would a federal tax lien be recorded there? Would they mention that a home has liens at the auction? In case I miss something. Thanks for that tip. I'll make sure to look good. Planning on walking by this weekend.

BK is bankruptcy. I don't know if that makes you naive for not knowing or wealthy for not ever having financial problems.

There is no such thing as a "dream house". It's just a building. Make decisions based on business not some silly emotional feeling toward a building.

Have you read the HOA bylaws to know what you're getting in to?

Here, auctions have a mini bid. You can't get a $1 house and rarely (here) do you get a killer deal once you figure in renovations and general headaches. If it's such a good house as you claim odds are there will other bidders and you won't win. Just be prepared with a number and when it exceeds your budget just walk away. It's business. (Here) The bank typically bids on the property and wins. I'd talk up the folks before and see who represents who to see what I'm up against.

It's very odd to me that a foreclosed house has no liens on it. Usually there are HOA fees or property tax liens involved. Unless your buddy does searches for a living, I wouldn't buy no liens. Expect lien headaches.

Quote from saladdin : BK is bankruptcy. I don't know if that makes you naive for not knowing or wealthy for not ever having financial problems. There is no such thing as a "dream house". It's just a building. Make decisions based on business not some silly emotional feeling toward a building. Have you read the HOA bylaws to know what you're getting in to? Here, auctions have a mini bid. You can't get a $1 house and rarely (here) do you get a killer deal once you figure in renovations and general headaches. If it's such a good house as you claim odds are there will other bidders and you won't win. Just be prepared with a number and when it exceeds your budget just walk away. It's business. (Here) The bank typically bids on the property and wins. I'd talk up the folks before and see who represents who to see what I'm up against. It's very odd to me that a foreclosed house has no liens on it. Usually there are HOA fees or property tax liens involved. Unless your buddy does searches for a living, I wouldn't buy no liens. Expect lien headaches.

Ha neither. Just terrible at acronyms.

And you're right. There are other buildings in the neighborhood so if we don't get lucky with this one we'll just move on. It's tough to keep your head straight when it's this much money and not something you can return, but I appreciate the straight talk.

I'll do an independent look for liens, and try and find a title agent to look as well.

Thanks again

GI is general index search. It is a name search to if there is any liens like federal lien, state tax lien, judgements, or bk attached to their name.

You can find if they have federal lien if you know the owner's name. If the name is common, you'll need a social security number to find the right person.

Unless there is an active short sale, there should be delinquent property taxes and HOA fees.