What’s the likelihood of winning this property at auction?

Question

My husband and I are going to the courthouse in another month to bid on a condo in a fast growing area. The judgment is $25,000. From what I see on all of the real estate search sites, the value is anywhere from $120K to $140K. Rents for this area and caliber of unit goes for $1100-$1200.

We’ve been to a couple of foreclosure auctions and in my experience it seems like the lender will always buy it back or the winning bid will be closer to the estimated value of the property.

Am I crazy to think that winning it at the judgment or close to it is an option? Does anyone have experience with winning an auction at the judgment price? Thank you.

Dana Whicker · Answer

@Danielle McClelland Hi Danielle, Quick question... Who's foreclosing? 1st, 2nd, HOA? If it's a bank, is it a mega bank, regional, local 1-2 branch bank, other?

If you can't answer, please don't even think about bidding.

Jay Hinrichs · Answer

Greg my bad let me re state that.. bank can only publish an opening bid at their max amount owed.. if they wish to show up and further bid they certainly can.. but the opening bid cannot exceed their full credit bid amount.

IN practice for a bank or servicer to bid up past amount owed would be rare.. private lender HML who see big up side might do this.

Wayne Brooks · Answer

Account Closed If you take the time, with maybe some help from the clerks in the office, you can do your own.....at least for the recorded liens. Unrecorded debts.....HOA debts, code violations, etc are a different thing. I’ve bought about a down at foreclosure auctions and just did my own (on one for over $100k I did pay for a title search to verify since it was a common name and had almost 200 entries to look at).

Otherwise, you can pay $50-$100 to one of the online title search companies for recorded lien searches.

Martin S. · Answer

Account Closed and others, I'm about to bid on our first pre-foreclosure as well and I would greatly appreciate your advice. I know that due diligence is key. But how extensive the title search should? 40 year search by a title company is $250. Way too much to pay for multiple properties (at least for me.) Some companies offer a simpler search for $100. That seems more reasonable. So how far back in time should the search go to have a good chance of not missing any liens and overdue taxes if I can't do 40 years? How can I make a decision here? Thanks so much, guys!

Martin S. · Answer

Thank you, Wayne. @Wayne Brooks.

Ron S. · Answer

Even $250 is nothing compared to the cost of a mistake in bidding. Yeah, i get it that you can't (won't) spend the money for a full prelim on multiple properties you might be interested in, but surely its worth it for one you plan on bidding on. Get the car wash with the wax, undercarriage treatment, 2nd rinse, and the air dryer if you want it clean. You get what you pay for.

Thomas Jackson · Answer

I have won multiple homes at the sheriff sales and have gotten them at very good prices. Typically the bank will only buy the house back for what is owed. Typically a bank representative will bid the exact amount owed on the loan and then even leave the courthouse and let others bid it higher. Sheriff sales are popular now so in my experience the margins are getting smaller and smaller as more people show up to auction to bid. Anything is possible when it comes to the auctions, but good luck!!

Ron S. · Answer

I don't think you are crazy to think that but maybe unrealistic instead. It's possible, but highly improbably that you will be able to pick the property up for judgment amount on this loan/foreclosure based on your numbers.

Brent Paul · Answer

I say go for it. The worst thing that could happen is you are out a little time, no money, but you get the experience of your first live auction. Turnout can vary greatly by area. My uncle went to an auction last month and only 2 people were there. He got some good deals, but then again these properties were about an hour from a major populated area. Kinda half way between suburban and rural.

Honestly I would start networking with Wholesalers or investors in your area. You might find a diamond in the rough.

Greg H. · Answer

Agreed

What’s the likelihood of winning this property at auction?

What’s the likelihood of winning this property at auction?

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