Pre-Auction Offer

[Julie Taylor]

Good afternoon BP Community! Thanks in advance to all of you who provide very helpful, extremely friendly advice. I love learning from you all!

I am looking at making an offer on a church property that is scheduled to go up for an REDC auction. I am curious if anyone can offer insight to what sort of percentage the bank might entertain in order to pull the property from the auction list. I understand that the property has been mortgaged for upwards of $250k in the past, although it has appraised in the last year for $140k and been assessed by the county for around $180k.

The intent is to use it as a church, not sell it or hold for future development.

Some details:

About 1500 sq ft, Frame Construction/Vinyl Siding
About 35 years old
About 1.5 acres
In a residential area, so it's grandfathered as a church or hold for future residential development only.
Not a fancy area, but not really bad either. Homes between $80k and $160 in the general area...and a few dumps.
Was scheduled for auction once before. Can't determine if it went and just didn't get bid to reserve or never went.

There's a pretty short timeframe for making pre-auction offers, but I'll be viewing soon and making a decision of what to put in LOI.

Your advice is greatly appreciated!

[Scott Hubbard]

Since this an REDC auction, I believe means this property is an REO and under an exclusive marketing agreement with REDC. Therefore, I believe you will have to deal directly with REDC.

It would be similar to a seller listing a property with a RE broker and you trying to contract directly with the seller. So, in this case, the seller (the bank) will likely have to pay REDC a commission or fee anyway since they spent marketing dollars and have invested time as well as other expenses.


This does not necessarily mean you cannnot accomplish what you described above, but that you should start with REDC first.

Another thought might be, that if the property is being auctioned off, there may be a limited pool of buyers for a church and in the format you might be able to get a better deal in an auction.

Though I have never offered on or attend auction for REDC properties, they are a less restrictive way for the general public to purchase property by allowing the winning bidder a chance to finance the property through traditional sources. Therefore, the sales price will usually be closer to retail than a traditional sale at the courthouse steps.

Good Luck!