Where would you find forclosure auctions?

[alexthegrape]

Hi,

 Where would you go to bid on forclosure houses?Where do they hold there auctions?

[Mr.fancypants]

Hi alexthegrape,

I see that you're interested in foreclosure auctions. That's not currently my reportoire but I have been to a few and watched. What you need to know about auctions is that generally whenever someone defaults on a mortgage, it becomes public knowledge. Therefore you can go to the Register of Deeds office and compile a list of the most currently defaulted people. Also check out www.myfir.com (it's free to the best of my knowledge). I subscribe to a business paper that lists pre-foreclosures weekly. Once you have located a property of interest and done your homework on it go to the county courthouse. I live in Nashville, Tn and that's how we do it here. The website I mentioned gives you the name of the homeowner, their address and the date of the auction. It's very helpful. Usually you just march down to the courthouse and do the bidding. Plan on watching a couple of times before you get involved. I am actually planning on getting more involved in this area of distressed property. Good luck and happy bidding.

[alexthegrape]

Sounds fun. thanks for the reply Mr.fancypants. i will defintily go to the courthouse soon and check out the auctions. I live in Washington, so the websight doesn'tt help me too much.But I will definitely go to the Register of Deeds office and ask for the list. Now if you win the auction, do you keep the title and own the property?

[Mr.fancypants]

Hi again alexthegrape,

If you're deadset on doing auctions, that's cool. But there's a few things you should know. Buying a house at auction isn't like buying other things at auctions. Typically, when you're the winning bidder you get what you paid for. This is true for RE as well, but the catch is that you might also be the new, proud owner of a lien or 2nd mortgage that you had no clue existed. Typically, this is the case. Basically, what I am saying is that it's often difficult to establish clear title of the home you're bidding on. I prefer to work with repossed (REO) properties that need rehab. You can also do pre-foreclosures. But that's not an area I currently work either. Don't get me wrong, I know investors who make a fortune doing this, but in my opinion it takes a seasoned investor.

[melanie]

If the first mortgage holder has initiated the foreclosure the lesser liens are usually wiped out.  If not you can negotiate with the lien holders afterwards.  Just a warning, a lot of people take out their anger on the house before they leave.  I have seen houses where the a/c was missing, the water heater was missing, graffiti on the walls, even doors missing.  Be sure you get a low enough price to cover the repairs you may need to do.  There is usually no way you can see the house prior to the auction.  In my state (FL) the foreclosed have 10 days to vacate the property but they may resist.  Also, if you win the bid you have to put 5% down in cash or cashiers check and come back with the rest in 24 hours.  Definitely go view a few of the auctions.   If you look on the Judgment of Foreclosure it should give the date, time and location of the auction.  If you want to do this I would recommend you find a private lender that specifically funds foreclosure auction purchases.  You can check with your local REI club to find one.

[alexthegrape]

Cool. thanks Melanie and Mr.fancypants. Your tips are great. It is giving me a view in what I want to invest in. Basically, REOs are bank owned property? Which they need some work on?

i'm sorry I have so many questions. I just want know the water before I jump in the pool.  

[Mr.fancypants]

Hi alexthegrape,

To answer your question, there are 3 types of foreclosed property. 1-preforeclosure, 2-at auction, 3-REO. I buy REO's that need rehab. I've found extremely lucrative deals by doing this. You should check it out too. You won't find a more motivated seller than a bank that knows they own a crappy house. Good luck.

[alexthegrape]

Hi Mr.fancypants,

Where would you find the REOs. Would they be auction?

[Mr.fancypants]

There is a website called reonetwork.com (I think that's it). Anyways, it's free. Basically it gives you all of the RE agents in your area that deal with REO properties. Something you seemed confused on is the terminology. REO is simply a foreclosed house that went to auction and no one bought it, therefore the bank repossesed it. REO means Real Estate Owned. About that website, all you need to do is email all the agents and tell them you're an investor who buys REO's. Trust me, when the agents smell a deal, they'll start showing you listings.
Good luck.

[alexthegrape]

Hi Mr.fancypants,

Thanks. You have been a very great help to me. I appreciate the replies. What do they mean when they say "destressed property".