Buying a Foreclosure via Auction in Florida?

Question

I am interested in completing my first ever flip. I am a Realtor and stalk the MLS, but there aren't any GREAT flip deals because I know the professional flippers are finding them before they even make it to the MLS.  I just started checking out the auction websites, specifically the "Broward County Clerk of the Courts Official Foreclosure Sale Site." I am in Fort Lauderdale. So pretty straight forward - you buy cash, as-is, no inspections, no title contingencies, nothing.  So, do your homework up front. Does anyone have experience purchasing a foreclosure via auction? I would love to connect with someone who knows what's up. There is a "final judgement amount," and a "plaintiff max bid..." I can Google these, but it would be much more helpful to discuss with someone who has the experience of actually purchasing at auction. Thanks in advance for comments, suggestions, details, etc. that anyone can provide!

Gina Stern · Answer

The art of the deal is in the voluntary and involuntary liens, whereas if you learn how to research the encumbrances of an auction property this will put you ahead of a lot of folks.

The way a lot of people make this process a little easier on themselves is to use an excel spreadsheet to either drag and drop or cut and paste from the County Public Document Records Search all the mortgages that have been recorded in the name of the defendants in a final judgement, then underneath where you have placed this information you do the same cut and paste for all the satisfied and released mortgages. Then you pair off the satisfied or released mortgages against the list of mortgages of record and you will be left with the mortgages still in play.

Repeat this exercise for all Lis Pendens, Liens and Judgements (matching against satisfied and released) and you will be left with a list of open encumbrances. Remember to look at the spelling of the defendants name i.e someone with the last name Davey might have been entered as Davy so you should search all the different ways of spelling the last name. Also in a joint spousal judgment check each spouse separately to see if they have any form of Lis Pendens, Liens and Judgements in their individual names.

This seems like a lot of work, but once you get into it and get a routine going its reasonably quick and simple.

Of course there are some extra complexities and anomalies  to it that would fill an eBook but in the end only practice will get you to understand these.

I would do a few test runs yourself and then buy a Title Report for $50 and match your findings against the report, this way if you have made any mistakes you will be able to back track and pick these up and get an understanding of where you went wrong, if at all :)

Wayne Brooks · Answer

@Heidi Braunhardt The FJ amount is simply the total amount awarded by the court.

The Plaintiff Maximum Bid is just that...it is how high the bank will bid.  They reveal this so bidders won’t run the price up today $150k if the bank is going to bid up to $180k, since if the bank takes it back, they have to pay a fee based on the final price.  This is why you see many properties “sell for $100 (the legal starting bid)”.  As you’ve noticed, the banks don’t always reveal their max bid.

Sometimes they have a max bid lower than the FJ amount, sometimes the same.

Of course, other than making sure it’s a first mtg foreclosure, you have to look out for hoa debts, recorded or not, unrecorded code violations, past due current property taxes, etc.

Heidi Braunhardt · Answer

Thank you Wayne and Elliott! Very helpful :)