Experienced auction buyer looking for advice on how to deal directly with current homeowner about to lose their house at the auction

[Robert Taylor]

Between my brother (who is my partner) and myself, we've bought at least 40 properties (residential and several commercial properties) at our local sheriff's auction over the last 10 years. As is common with a lot of local auctions, here in Milwaukee County at least 90% of the properties going through the auction are bought back by the bank that's foreclosing, they've set the opening bid amount too high to make buying it at the auction make any financial sense to buy at the auction.

This also brings to mind another possible strategy, dealing directly with the soon to be former owner who's losing the house. Here in WI, the sale is not final when the house goes through the auction, it is finalized at a confirmation hearing, which is usually about 3 to 6 weeks after the auction date. So, for the house I'm interested in, it went through the auction today, March 17th but the sale won't be finalized until April 7th at the confirmation hearing. So, the soon to be former owner has these last 3 weeks to possibly save their ownership. Usually nothing changes and the sale goes through, although occasionally something happens, often its saved or at least put off when the owner files for bankruptcy, although if they're somehow able to come up with the money, they can save it that way, too.

I'm wondering if anyone here has had success dealing directly with the soon to be former owner of properties?

I have the cash to pay off what the amount was that the house sold for at the auction today. I know that you have to be careful when dealing with the owners, due to all of the "foreclosure scams" that have been done lately, but I'm simply looking to first get inside and see the house to make sure its still in decent shape and then to contact the bank to see how much I could buy it for or how much to pay off what they owe. I did find the owner on Facebook, so I have at least one way to contact him, it looks like they already moved out of the house.

[Account Closed]

Originally posted by @Robert Taylor:

As far as the opening bid amount at the auction, the vast majority of the time the opening bid is somewhere right around what is owed on the property, which is pretty much always more than its worth. Yet, for some reason, occasionally they will drop the bid down in price on certain properties and those are the few of them that are worth buying at the auction. I used to subscribe to a service that would list all the data on each property each week, including what was owed, but I dropped my subscription a while back and haven't renewed it yet, so I don't know what was owed on it.

Correct me if I'm wrong, because I don't know WI foreclosure. But in order to make a payoff doesn't the borrower owe the full amount of the loan, not the minimum bid set sale. When a borrower goes to pay off the loan before the arraignment, they can't use the minimum bid amount, can they? If so, you'd really need to know what the judgment amount is before you contact the owner.

Also, if the sale doesn't go through because you make a payoff, does that reverse or leave in place any other liens that were included in the foreclosure suit (judgments, jr. liens, etc)? Sorry for the questions, as judicial foreclosure is unfamiliar to me.

As for contacting the owner: if the property is empty, what solution is it that you are offering? If he's already moved, he doesn't need the time to do that. You could offer him a consideration payment to cooperate with your plan (make a payoff and get a deed) and see if he goes for it. But IMO there's not a lot of incentive there. Regardless, if the numbers are right, I'd contact him and tell him you'd like to make a deal about the house.