Los Angeles, CA · Member since 2016 · 22 posts · 3 votes
Hello, BP Community,
I've been watching a probate property in LA that requires court confirmation and has finally been assigned a court date. I'm considering attending the hearing and submitting an overbid in court, and was wondering if anyone has journeyed through this process and if they have any thoughts, or advice. From what I understand, I need to bring a check that equates to 10% of the overbid amount, plus additional cashier checks in varying increments to cover the 10% EMD if further overbidding continues above the first overbid amount. I'm also assuming I'll need to provide POF or Letter from Lender as well as completed Paperwork. I'd also love to find out (if anyone knows) how often overbidding takes place on a property that's listed on the MLS.
Broker/Investor · Los Angeles, CA · Member since 2016 · 12 posts · 11 votes
10y
Hello Linda!
The general rule for probate properties listed in the MLS in the LA county are as follows. You would need to make an offer on the probate listing through an agent. If your offer is the first offer accepted then all overbids are 10% above list price or the first accepted offer. Please be aware that there can be a bidding war. The listing agent will update the MLS once a hearing has been set. There is usually one future court date that all interested parties must attend. The court will announce the offer in first position and then ask for any overbids. Yes, your understanding of the overbid process is correct. Be sure to have your agent accompany you to the hearing. Best wishes.
Broker/Investor · Los Angeles, CA · Member since 2016 · 12 posts · 11 votes
10y
Hello Linda!
The general rule for probate properties listed in the MLS in the LA county are as follows. You would need to make an offer on the probate listing through an agent. If your offer is the first offer accepted then all overbids are 10% above list price or the first accepted offer. Please be aware that there can be a bidding war. The listing agent will update the MLS once a hearing has been set. There is usually one future court date that all interested parties must attend. The court will announce the offer in first position and then ask for any overbids. Yes, your understanding of the overbid process is correct. Be sure to have your agent accompany you to the hearing. Best wishes.
Beverly Hills, CA · Member since 2015 · 38 posts · 10 votes
10y
@Linda Cheng The auction company should provide information about how it works on their website or marketing material. For instance, Kennedy Wilson Auction Group does a lot of auctions in LA, and they provide general info about how a particular auction works on their site (e.g.: http://www.bidkw.com/auctions/how/348) and on their brochure (see pg.6 "terms of sale": http://www.bidkw.com/files/uploaded/auction_348_2223.pdf).
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
@Linda Cheng While cannot give you stats on % of MLS probate properties that get overbid, I'd suggest it's still worth attending the sale.
It really IS a numbers game.
If there's anything special about the property, it's history or upside potential for lot development, the demand will surely push the or ice upward.
In this peculiar market with scarcity of RE product availability, aggressive buyers with cash are frequently paying above market prices based on speculative trends.
My take: show up to court and be prepared for either minimum overbid or a price limit. Know your numbers and your limits. You will learn more than 98% of other RE investors.
If you are financing, lender will only lend based on the lower of their appraised value or contract price.
Also, this is not the place for 'wholesaler' trying to interject themselves into a deal.
CA Court confirmed sales require bidders to provide buyer vesting in all offers submitted.
Los Angeles, CA · Member since 2016 · 22 posts · 3 votes
10y
Appreciate the awesome advice, @Rick H.! I'm actually looking forward to receiving an education while attending the court date! @Adam Phebus I didn't find the probate process connected with an auction group, but I will contact the agent of record.
Investor · Kern county Riverside County, CA · Member since 2008 · 494 posts · 261 votes
10y
I think @Adam Phebus may have mixed up his auction info. There are many different dispositions of real estate that all use the term auction. A probate auction, a trustee sale and online or live auctions companies while all auctions are very different in procedure, rules, etc.
Beverly Hills, CA · Member since 2015 · 38 posts · 10 votes
10y
@Derek W. and @Linda Cheng - Not sure if the exact info you're looking for is on the Kennedy Wilson Auction links I sent, but they were for probate court confirmation.
Broker/Investor · Los Angeles, CA · Member since 2016 · 12 posts · 11 votes
10y
Great information BP community. Linda, your post doesn't mention if the probate listing is being auctioned by Kennedy Wilson in the MLS. KW is a premier auction company, and probate listings are also sold through real estate brokerages minus the auction platform.
Broker/Investor · Los Angeles, CA · Member since 2016 · 12 posts · 11 votes
10y
@ Linda Cheng, great! If you need any information for the probate listing or assistance in putting in an offer I am happy to help, providing you are not already working with an agent/broker.
Los Angeles, CA · Member since 2016 · 22 posts · 3 votes
10y
@Karen Foster Thank you. I do have an agent who is submitting my offer, but please do ping me if you have wholesale inventory you'd like to offload to an investor!