Government Auction

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Help and advice, PLEASE!

I have never invested in real estate before but have wanted to for the last 10 years.... but now may be the right opportunity. There is a government USDA auction tomorrow at 1:00 on a property that I'm interested in. I've NEVER been to one before and I'm so nervous about the whole process. I've called the clerk's office, the USDA office, and the trustee's office. Here are the details that I have thus far:

1943 brick ranch (in a nice family neighborhood)
3 bed/ 2 bath
1020 sq ft

Estimated value based on tax value is $88k - $95k
Opening bid from gov't is $26,120

I cannot see the inside beforehand.

I looked at the register of deeds records online and see that the owner purchased the house with a USDA backed mortgage back in Dec 1999 with an $86,817 mortgage. No other records on the property so I'm assuming that there are no other liens to worry about.

I am supposed to show up with 5% of the bid price in cash or official check. So, if my max is $60k that I'm willing to pay, I need to just bring $3k. Then the winning bidder has to wait 10 days for any upset bidding. After that, I'd have 20 days to show up with the rest of the money.

Ok, so am I missing anything at this point? If it helps, I'm in NC. I've never done anything like this before and I'm scared silly but I won't learn without jumping in, right? How much would you guys bid on this house??

[Mike G.]

Even if you can't get inside the property - go look at it from the outside if you have not done so already. The condition of the exterior MAY give you an idea of what to expect inside. If the outside looks like garbage, the inside probably will.

Do NOT use the appraised tax value for estimating the property value. The current value of the home could be half of the taxed value, or twice as much. You need to look at recent sales of comparable homes in the neighborhood. If you know a real estate agent or an appraiser, have them estimate the market value of the home for you. If you don't know someone, there are sites online where you can find recent sales to try to get a decent guesstimate yourself.

You should check to see if property taxes and/or penalties are owed on the house. Here, we can check this online. You need the property's Assessor's Parcel Number (APN). Again, a real estate agent can get this for you, or you may be able to find it on one of those websites where you can look for sold properties. If you can't access the tax info online, you'll probably have to call the county's tax assessor office to see if you can find out what (if anything) is owed.

Also, if you know a real estate agent or title agent, it would be nice to have them do a title search for you, just to check if there is anything else on the title that your search didn't show up. I'm not sure how thorough the deed check you did would be - perhaps others on here with more experience there could tell you that.

What is your plan with the property? Are you going to move in, rent it out, or try to fix-and-flip? That will determine how much extra money you need to budget in to the purchase. For example, if you are planning on flipping it, you have to add in the costs for renovation, holding (utilities, gardening, etc.), and sales costs (say around 6-7% of the sales price).

If you end up getting the house, make sure to immediately get insurance on it and visit the property to see if you can have a look inside. Ask the occupants if they mind if you take pictures, telling them you are planning on doing some renovations and you want to start lining up your contractors.

And I don't know what if your state has a redemption period for houses sold at auction - meaning you might not actually be able to immediately take ownership - hopefully someone here familiar with North Carolina can help you out there.