Real Estate Auctions - Don't Be Confused.
May 14, 2009
Recently there have been 2 full page ads for real estate auctions and extra little sticky notes on the front of a newspaper announcing a coming real estate auction. Then there are the notices printed, usually in the classified section of a newspaper, that announce the date, time and place when a property will be auctioned at a trustees' sale. These are two very different sales events.
The auction being advertised by sticky notes, mail announcement, and large newspaper ads are being put on by auction houses that represent property owners who are using the auction format to sell the properties that they own. I can remember this auction method being used in the 1990 real estate recession and have seen in come back the past 18 months. Like any auction for tangible assets, potential buyers need to register and provide the auction company with evidence of their credit worthiness. Some auction houses have lenders at the auction that will take a buyers application and provide the necessary guarantee that the buyer is qualified. A buyer who purchases a property at a real estate auction may or may not have contingency in the offer. Generally, the bidders are to have inspected the property prior to making a bid and will have satisfied themselves as to the condition of the property.
The second type of real estate auction is the result of the statutory regulations of the foreclosure process. These are auctions in the sense that interested buyers can assemble at the stated place for the sale of the property, (frequently the court house steps). These potential bidders must show the auctioneer (the representative of the Trustee who is conducting the sale for the lender) that they have either cash or bank cashiers checks for the amount they intend to bid. Once a bidder is successful at a trustee's sale, he receives a trustee's deed and becomes the owner of the property subject to any other liens that may still be recorded against the property. Folks planning to bid at trustee's sale need to have researched the property as to other liens, condition, etc. According to a ForeclosureRadar (www.foreclosureradar.com ) report, 88% foreclosure properties are not purchased through a trustee's sale, but go back to the lender. Buying on the court house steps is riskier than buying at a professional auction.
Frankly, the best way to purchase foreclosure properties is with the assistance of a professional real estate agent and after the lender has regained title to the property.
Recently there have been 2 full page ads for real estate auctions and extra little sticky notes on the front of a newspaper announcing a coming real estate auction. Then there are the notices printed, usually in the classified section of a newspaper, that announce the date, time and place when a property will be auctioned at a trustees' sale. These are two very different sales events.
The auction being advertised by sticky notes, mail announcement, and large newspaper ads are being put on by auction houses that represent property owners who are using the auction format to sell the properties that they own. I can remember this auction method being used in the 1990 real estate recession and have seen in come back the past 18 months. Like any auction for tangible assets, potential buyers need to register and provide the auction company with evidence of their credit worthiness. Some auction houses have lenders at the auction that will take a buyers application and provide the necessary guarantee that the buyer is qualified. A buyer who purchases a property at a real estate auction may or may not have contingency in the offer. Generally, the bidders are to have inspected the property prior to making a bid and will have satisfied themselves as to the condition of the property.
The second type of real estate auction is the result of the statutory regulations of the foreclosure process. These are auctions in the sense that interested buyers can assemble at the stated place for the sale of the property, (frequently the court house steps). These potential bidders must show the auctioneer (the representative of the Trustee who is conducting the sale for the lender) that they have either cash or bank cashiers checks for the amount they intend to bid. Once a bidder is successful at a trustee's sale, he receives a trustee's deed and becomes the owner of the property subject to any other liens that may still be recorded against the property. Folks planning to bid at trustee's sale need to have researched the property as to other liens, condition, etc. According to a ForeclosureRadar (www.foreclosureradar.com ) report, 88% foreclosure properties are not purchased through a trustee's sale, but go back to the lender. Buying on the court house steps is riskier than buying at a professional auction.
Frankly, the best way to purchase foreclosure properties is with the assistance of a professional real estate agent and after the lender has regained title to the property.
posted by shirley harry at 8:47 AM
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