How do you protect/endorse your certified funds at auction?

Question

How should one property set up their cashiers checks for courthouse steps auctions?

Is there anything specific to put in the memo beforehand?

Also, have there ever been any situations where a scammer is up their posing as an attorney/auctioneer trying to get people to give them huge cashiers checks?

Jay Hinrichs · Answer

Just talk to the criers they will know

William Hochstedler · Answer

In Utah, the major trustees require the following:

• Certified funds made to the individual or the trustee (do not make it to an entity and try to endorse)
• Cannot be drawn from a credit union
• The certified checks must be less than 90 days old

I too make them out to myself and endorse.  I don't know what level you need to be operating at to have it make sense to have a bunch of checks to each trustee, but it's certainly higher than mine.  I can go to 10 auctions without getting a property.  Just the logistics (and cost) of going to the bank for each individual property seems pretty cumbersome.

I have very often seen guys take out crumpled up cashier's checks that they've been carrying around for weeks.

I don't really see the risk of impostors.  Has this ever happened?  If the sale gets cancelled and the trustee doesn't show up allowing room for someone to impersonate a trustee, you are in a small enough market where you should know some of the bidders and possibly the attorney or sheriff.  If you are in a much larger market with strangers, this scenario seems just about impossible because of safety in numbers.

If you are really concerned about this, you can call the trustee on the notice and confirm the sales and attorney while you're standing there.

Jeff Kehl · Answer

@Jay G. I have the checks made out to me and only endorse them when I have a winning bid. But I am in a small county and it is usually either Auction.com or an attorney/title company I know.

If someone random showed up to auction a property I would either verify they worked for the attorney handling the foreclosure of contact the attorney and make sure they had hired said person/company.

William Hochstedler · Answer

@Jay Hinrichs

A couple of our counties are even chummier than that.  The larger trustees all hire the same attorney to conduct the auction.  So there's only one or two attorneys representing the lion share of the sales.

I guess the best advice for @Jay G. would be to call the trustee and get their requirements beforehand and go to a few of these to scope the scene.  It's probably a worthwhile experience for anyone in this business.

Cheers

Jay Hinrichs · Answer

@Jeff Kehl  I never endorsed checks  many trustee's wont take them.. and those investors who tried that could not bid. your handing over cash.

a simple call to the trustee company or attorney firm.. I ALWAYS make out my check to the trustee or attorney firm.

much safer that way.. everyone knows in a county who does the foreclosures.. Or let me put it this way if your going to engage in this you SHOULD know... and if you follow the sales for any length of time you will see the same company over and over.. I never could under stand the endorsing the check routine..

David Weintraub · Answer

You could show up earlier and ask who is the auctioneer.

Jay G. · Answer

I tried this today for a couple. Would you be surprised to find out they are pretty hard to get on the phone?  I'll just put in some time at the courthouse steps this coming week and get to know some faces and ask those questions.

Jay Hinrichs · Answer

@William Hochstedler  even in the PDX market there is only a few criers you get to know them all.

now when I was buying in Atlanta that was a cluster there.. 7 or 8 criers all going off at the same time.. very hard to chase them there.. we still got our share of them.. but you cannot cover them all unless you send 5 or 6 people to each county .. this is because the sales are one day a month..  but if endorsing works go for it.

I just know I have bought properties for opening bid were my competition did not have the checks made out to the trustee and they would not accept endorsed checks.. so I always did it that way.

I can see where the endorsing allows you more flexibility.. but I was able to pull a lot of money each bidding day.. if I did not use the checks the bank would just take them back same day .. I would call after the sale and let them know what I spent.. then they would take those funds off of my credit line.

Jay Hinrichs · Answer

We had checks for each one we were going to bid on usually 3 to 3 million per auction. And the big boys in ca probably show up with 5 to 10 million

But if they will accept endorsed checks I guess that's what u can do most trustees in Oregon would not accept them.  Every state of corse has their sop s

Jay G. · Answer

So you would show up with certified checks payable to... nobody? Or specifically to the trustee/firm for the property you're aiming for?  In our area of California, The problem is there are 20+ different trustees some days and only a few properties might be sold.

My banks will not issue a cashiers check or certified funds without a name on the pay-to field (which seems wise).

I guess I'm not seeing how you have time to make a certified check payable to the trustee if you don't know who the trustee will be (assuming you're interested in multiple properties).

How do you protect/endorse your certified funds at auction?

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