Courthouse Auction questions

[Rodney Dawkins]

Had a property under contract which was in preforeclosure, 2 weeks before closing the property landed in foreclosure with the bank stating that the property would be sold on the court house steps. The only way to salvage the deal is to implement a new contract for 10k more than our original contract or purchase at court house steps. As I've never done auctions before would anyone share any insights as to the auction process, and what pitfalls I should be aware of.

[Don Konipol]

Rodney, you are confusing a couple of different concepts. The bank has not foreclosed, the foreclosure is the act of selling the property at a foreclsoure sale (auction). What the lender has done is accelerate the note (call it all due, principal + interest + legal fees) and probably post it for foreclosure with the county.

North Carolina is a non judicial foreclosure state, so there is no "court" auction. The foreclosure sale or auction would be handled by the trustee of the trust deed, a private party. As long as the sale has not taken place you or anyone else can purchase the property and have the loan paid off out of the purchase proceeds.

North Carolina is unique in that there is a 10 day redemption period after the foreclosure sale so that the debtor can still pay off the property and retain ownership if the debt is paid off within 10 days of the actual sale.

I don't know if the deal is worth persuing for you, but if it is you would be best advised to spend $300 or so for the advice of an attorney specializing in North Carolina real estate law.

As a side note, even if you can not close before the foreclosure sale, all is not lost. The debtor can probably optain a temporary restaining order (TRO) from a county court temporarily blocking the foreclosure sale. Also a declaration of bankruptcy, which can be file pro se by the debtor, will put an automatic stay on the foreclsoure auction.

This all may be more complicated than what you had originally bargained for, and if you are new to the game you might want to pass and move on to the next deal. On the other hand you may want to mix it up and try to negotiate an even better deal since the seller would likey get nothing if the property does go to foreclosure.