Recently with all the foreclosures in the U.S. housing market there have been a lot of people who are looking at purchasing real estate at the public auctions. San Diego County has 3 locations where san diego foreclosures go to sale daily. The three locations are San Diego, Oceanside, and El Cajon.
The first thing most people who are looking to purchase at the trustee sale need to know is how the auctions work. Many come to the auction thinking they can get financing for the property. This is a complete myth. Trustee Sales are all cash purchases. No money? No property. You can’t believe how often some people come with cashier’s checks for $100,000 only to bid up a property to $190,000 then ask to get financing. What are they thinking? Then the property has to go up for auction again. It can be very frustrating for those who buy trustee sales professionally.
The second most important thing to know at the trustee sale is whether you are purchasing the correct property and the correct trust deed? If not, you might be in for a rude awakening. This type of mistake usually is never made by professional buyers, but I have seen many bid on trust deeds they thought was a first lien, only to find out later it was a second trust deed. Oops, a very costly mistake.
The basic trustee sale occurs like this. The auctioneer usually announces all the postponements and cancellation of sales first. Any new postponements or cancellation gets announce as the sale continues. After all the postponements and cancellations are finally announced. The sale of active trust deeds start. The auctioneer will read out the disclosures, address, trustee sale number, etc. The opening bid will be announce for that property. Anyone who now wishes to buy this property now needs to get qualified. The process of getting qualified is simple. Show the auctioneer the money.
Each property is then auctioned off one by one. If no third party bids on a property with an opening bid, the property is sold to the beneficiary (usually the bank). What is the difference between the published bid and the opening bid? The published bid is usually what is still owed on the property. In the currently market. The published bid is quite often much higher than the property is worth. The opening bid is what the beneficiary usually will take for the property. Many lenders will lower the opening bid quite considerably in order to incentivize investors to purchase the trust deed.
All trustee sales on foreclosed properties are as is, without any guarantees or warranties. The property is sold subject to any and all liens. This means if you buy a property there is a junior lien. You will be responsible for all liens that are above or superior to the trust deed you just purchase. There are also some things such as property taxes or mechanics liens that stick with the property. Also, if there is an occupant in the property, it will be your responsibility to get them out. The bank won’t do that for you.
The best advice I can give anyone who is looking to purchase at the trustee sale. Is do your homework very carefully and know what you are doing. It’s very risky and there are a lot of things the average person doesn’t know. A mistake can be very costly.
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Tags: foreclosures, trustee
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This entry was posted on Saturday, November 19th, 2011 at 12:59 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.