Anyone ever bought a house at an auction?

[8Up]

So I have been pissing and moaning about wanting to buy a farm..acreage..whatever, for a while now. Well we found out Friday that te place we are interested in is going to auction next Monday at 11AM. I want to go but I dont know what to expect. I think it will be abunch of flippers there trying to buy houses cheap but I have no idea. Anybody ever been to one of these things? I knwo you ahve to come up with 5% of the agreed upon price by 4PM that day, and the remaining amount in 30 days. That part doesnt worry me so much, just the actual bidding and winning part.

[snide]

Highest bid wins. That's all I know.

Good luck!

[Blademaker]

Have you been inside and inspected the house/property?

[CubSmurf]

Found out that the house I bought was put in an auction the year prior, and there were ZERO bids. Found that odd. I thought it was a steal when I purchased it...

[lspencer534]

You don't have muchtime to do all of this, but here goes:

1. Get a title search performed on the property. Not only is there likely a first morgage on the property, there could be a second or even a third. Other pesky little thing like unpaid taxes may have to be dealt with.

2. Get an appraisal done.

3. Get a home inspection done.

4. Have an agreement with yourself that the maximum you will bid is X dollars. Do not bid a dollar more. You may be bidding against a "plant" or "mole" of the auction company.

4. Be aware that you are buying the house "as is, where is". Auction sales come with an "Arkansas Warranty": If if breaks in two, you own both halves.

5. Before the auction starts, find out all about closing; i.e., who's doing it, who's responsible for all closing costs, if an escrow agent will be used to assure that your money goes to pay off any liens, whether you will get a warranty deed (or at least a special warranty deed), etc.

[Joecooool]

Do a records search to make sure there are no liens against the property.

[Yamma]

Does it list which company it's through (Freddie Mac, Fannie Mae, etc)? A number of those companies take care of a title search so you won't be stuck with a previous lein. If not, ask your lender (if you aren't baller and paying cash) a good Title Insurance Company to pull a search - otherwise do your research and look one up. Getting an appraisal and inspection done (as mentioned) is highly recommended. Especially if the home has been sitting vacant for any amount of time.

[8Up]

Originally Posted by Blademaker

Have you been inside and inspected the house/property?

Yes, been in and out, under etc 3 times in the past 6 months just to keep an eye on things.

Originally Posted by lspencer534

You don't have muchtime to do all of this, but here goes:

1. Get a title search performed on the property. Not only is there likely a first morgage on the property, there could be a second or even a third. Other pesky little thing like unpaid taxes may have to be dealt with.

Done, good friend is a realestate lawyer, search came back clean.

2. Get an appraisal done.
Bank did an appraisal last week, came in way high IMHO.

3. Get a home inspection done.
Hadnt thought of this, I will see if I can get it done this weekend.

4. Have an agreement with yourself that the maximum you will bid is X dollars. Do not bid a dollar more. You may be bidding against a "plant" or "mole" of the auction company.
Have a number in mind. I will bring my lawyer friend with me to the auction to hold me to it.

4. Be aware that you are buying the house "as is, where is". Auction sales come with an "Arkansas Warranty": If if breaks in two, you own both halves.
Understood, didnt know this but I guess I assumed it.

5. Before the auction starts, find out all about closing; i.e., who's doing it, who's responsible for all closing costs, if an escrow agent will be used to assure that your money goes to pay off any liens, whether you will get a warranty deed (or at least a special warranty deed), etc.

Do you have any suggestions abotu where I can find out these details? I found the forcloure notice in the newspaper, maybe its in there?

Originally Posted by Yamma

Does it list which company it's through (Freddie Mac, Fannie Mae, etc)? A number of those companies take care of a title search so you won't be stuck with a previous lein. If not, ask your lender (if you aren't baller and paying cash) a good Title Insurance Company to pull a search - otherwise do your research and look one up. Getting an appraisal and inspection done (as mentioned) is highly recommended. Especially if the home has been sitting vacant for any amount of time.

I believe the mortgage holding company is Ocwen, I am told they suk to deal with but have no personal experience.
I will ask my realtor friend about a good inspector. would that same person be able to do the appraisal? Or would an Appraiser be able to do a valid inspection?

Thank you for the suggestions. If everything goes right, this could be a really good deal. The one thing I found out is that the people have $353,000 in loans out on the property. 288k to one bank and 65k to the second bank. interestingly enough, the appraisal that the bank had done came in at $350,000 even after its been on the market for over 700 days with out any viable offers. My drop dead offer is $275 for the auction, but I will start at $150k. Thats about all I know.

[Mike Mercury]

Originally Posted by lspencer534

an "Arkansas Warranty": If if breaks in two, you own both halves.

[lspencer534]

Originally Posted by 454_71Stingray

Yes, been in and out, under etc 3 times in the past 6 months just to keep an eye on things.

Do you have any suggestions abotu where I can find out these details? I found the forcloure notice in the newspaper, maybe its in there?


I believe the mortgage holding company is Ocwen, I am told they suk to deal with but have no personal experience.
I will ask my realtor friend about a good inspector. would that same person be able to do the appraisal? Or would an Appraiser be able to do a valid inspection?

Thank you for the suggestions. If everything goes right, this could be a really good deal. The one thing I found out is that the people have $353,000 in loans out on the property. 288k to one bank and 65k to the second bank. interestingly enough, the appraisal that the bank had done came in at $350,000 even after its been on the market for over 700 days with out any viable offers. My drop dead offer is $275 for the auction, but I will start at $150k. Thats about all I know.

An appraiser won't do and inspection and vice versa (I've never met one who could do both, anyway). The other info you seek isn't going to be in the foreclosure notice. You can call the lawyer who is doing the foreclosure to get contact info at the bank, which likely has a title search. I doubt that the foreclosure lawyer will share one with you for rear of conflict of interest.

Look up a title insurance co. in the Yellow Pages or on the net. You'll pay extra for getting a search done in time.

[Lightfoot]

I bought a rental two years ago at auction. There were only three parties there bidding, counting me. I actually bought it for less than i thought it would bring (even with the buyers fee added). What it will bring depends on how many people show up at the auction actually interested enough to raise their hand. Most are just nosey neighbors curious what it will bring. Of course, the auctioneer can (and most will) jack the bidding without actually having a money bid on it, so you have to watch closely. Like someone else said, set your max price and don't bid a dollar over it. It's really hard to get a bargain nowadays at an auction, everyone has the same idea, but you can catch a break every once in a while. We went to 6 different auctions before we ended up buying one. Pay close attention to the announcements just before the auction. The sale day announcements will trump anything that has been said or published up until sale day. Good luck!

edit: if it's a bank owned property, the bank will likely not let it go for less than they have in it. They can buy it back, put it in a government backed fund (a big stack of our tax dollars), and sit on it for a year, all the while-not even attempting to sell it. Once they have sat on it for a year (or whatever the time frame set by the fund), they can collect the fund for their so-called "losses", then they will list with a realtor and sell it for full retail. They end up getting back all their money -and much much more. It's the American way.