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Should I bid during the upset period on soon to be REO?
I found a foreclosure I'm interested in and just trying to strategize.
The bank has the winning bid. Is it a good idea to let the bank win the auction, and then try to negotiate with them? Or, place an upset bid and win it myself?
I like that if the bank takes ownership, any title issues will be cleared up, but I also don't want to have to pay more for this property. On the issue of title, a friend of mine who has being title work for 20 years has helped me research this property and he's seen nothing that would suggest I would have any issues, but did suggest a real estate attorney and title insurance regardless.
Thanks for any help!
Quote from @Mike Dawson:
I found a foreclosure I'm interested in and just trying to strategize.
The bank has the winning bid. Is it a good idea to let the bank win the auction, and then try to negotiate with them? Or, place an upset bid and win it myself?
I like that if the bank takes ownership, any title issues will be cleared up, but I also don't want to have to pay more for this property. On the issue of title, a friend of mine who has being title work for 20 years has helped me research this property and he's seen nothing that would suggest I would have any issues, but did suggest a real estate attorney and title insurance regardless.
Thanks for any help!
Banks REO
Pros:
1. You get a clear title including the bank paying any past taxes and assessments.
2. You have a chance to check the house for cost of repairs
Cons:
1. The price Bank may list most likely will be more than your next upset bid amount.
2. You will have more competition than you purchasing from the FC sale
Thanks. That's kinda what I figured. Fortunately, I have access to the house to estimate repairs. I ended up contacting a real estate attorney and will likely get a title search and move forward with bidding.
#3 All Forums Contributor
- Investor
- Virginia
@Mike Dawson
What state is this in? As in some states like PA an upset sale you buy it at auction and all liens are not wiped..
If you let it go to auction:
1. Bank could take a year to sell a property
2. How do you know someone else may not outbid the bank?
Quote from @Mike Dawson:
I found a foreclosure I'm interested in and just trying to strategize.
The bank has the winning bid. Is it a good idea to let the bank win the auction, and then try to negotiate with them? Or, place an upset bid and win it myself?
I like that if the bank takes ownership, any title issues will be cleared up, but I also don't want to have to pay more for this property. On the issue of title, a friend of mine who has being title work for 20 years has helped me research this property and he's seen nothing that would suggest I would have any issues, but did suggest a real estate attorney and title insurance regardless.
Thanks for any help!
I'm looking at the same in California. Getting a pre-lim report from title first to find out any other liens against the property and yes key is knowing or being able to estimate a level of repair. I'm seeing properties sell at auction for around 60-67% of the property value (still more than owed on the loan) and a quick drive by told me 3 or the 4 properties I was looking at wouldn't make sense due to the condition. The other avenue to look at is seeing if the owner is open to a deal before it goes to auction. the closer to auction the more chance of motivation to not lose everything. Back in 2011-2016 here when banks took them back, they were putting in new paint and carpets then listing them at a higher value..... not sure if thats happening now.
Mike please keep us updated on the status of this. I have bid on a few properties during the upset bid period and have found if it is a good deal there will be several bidders. It can be a frustrating process that can drag on for 30-60 days. Most counties in NC require a minimum of 5% increase from the last bid. I am currently back & forth with 2 other bidders on a prime building lot, but it is starting to reach my max price. I have not had any luck with an REO after the bank has acquired the property, but may try this strategy.
It was bid on last week, so I didn't have to worry with the bank, and it bought me more time to consider. I will be upsetting that bid today. Hopefully the guy won't be ininterested in a war and was just looking for a good deal if the bank was the only interested party.
Hey Mike,
I hope you won your bid on this property. If not, there are always new ones that come along. I found the bidding process to be very profitable in NC for more than 20 years now. You should learn how to do your own title searchs, it saves money, time and is really not hard! NC is the only state that has a 10 day upsetbid process, so it's true, it can be painfull and drawn out. If I really want a property I usually try to bid low enough where I can still make money but high enough so the next guy who has to bid at least 5% or $750 higher, (which ever is greater, true for all counties in NC) will need to think twice about upseting my bid. That doesnt mean I always jump up the price of my bid, but in my book, the idea is to win the bid as soon as possible. The longer it sits in the bidding process the more time it gives other investors to notice it, check it out and possibly upset the bid.
Quote from @Daniel Gabrielli:
Hey Mike,
I hope you won your bid on this property. If not, there are always new ones that come along. I found the bidding process to be very profitable in NC for more than 20 years now. You should learn how to do your own title searchs, it saves money, time and is really not hard! NC is the only state that has a 10 day upsetbid process, so it's true, it can be painfull and drawn out. If I really want a property I usually try to bid low enough where I can still make money but high enough so the next guy who has to bid at least 5% or $750 higher, (which ever is greater, true for all counties in NC) will need to think twice about upseting my bid. That doesnt mean I always jump up the price of my bid, but in my book, the idea is to win the bid as soon as possible. The longer it sits in the bidding process the more time it gives other investors to notice it, check it out and possibly upset the bid.
It is still being bid on... I was hoping it would fly under the radar!
I have a friend in the title business that has offered to train me how to do title searches, and with his help, I did one on this particular property. I have a lot more to learn on that. Winning asap definitely seems like the way to go. I could have been working on this place already. Instead, I'm going every 10-15 days to shell out a couple hundred bucks here and there. Once I get more confident in this process, I may come out of the gate with a bid close to my mao.