Buying at a foreclosure auction - NJ, Merce County

[Chaits J.]

Dear All,

I own couple of rentals that were bought as a regular sale and would like to venture into auction sales. There are a couple of condo's from my neighbourhood that are on auction schedule on Sheriff Sale list. Can you please suggest what are the steps to take in purchasing a property at auction.

My common sense suggest below but want to know from experts if i am missing any other steps.

a) Hire a Title search company and look for title issues ?

b) Check with condo association for any unpaid dues

Also once i purchase at the auction, what's the process to get someone living there to vacate ? How many months i am looking at if i have a tough occupant.

Thanks!

[Natalie Schanne]

@Chaits J. - I've been to several recent Mercer County Sheriff's Sale auctions.

Tips:

- Auction prices don't really start at $100. The bank has a 'reserve' upset price. The auctioneer will bid that price on the bank's behalf until it is met, so the sale is either $100 back to the bank or with bids starting at upset price + $100, such as $100,100. Bring 20% in cash or cashier's checks (to yourself) to bid.

- About half the properties will have bank-set upset prices that are too high, and these will not be bid on by anyone at the auction.

- LIENS: Go to the Mercer County office on Tuesday or Wednesday before the 2pm sale and use their terminals to look up your target properties. This will show you recorded liens on the property that a paid title search would also access. A title company could charge $75-100 per quick search, and that property might not even be available at auction that day or the bank price might be crazy high. Some people don't look up liens, but that's risky with IRS liens, property taxes, utility bills, 1st and 2nd mortgages, etc.

- If you know the condo association number, call them to ask any unpaid dues. I did not have success reaching one on the phone recently. (I called several different numbers off Google for Scotch Run Association for Kyle Way in Ewing). Condo with comps of $150-$165k sold for $116k at auction after a mini bidding war. (After repairing, the margins for anyone flipping are pretty slim). 

- Many of the nicest properties will be occupied. Rule of thumb seems to be to plan for 60-90 days to help the occupants move, though I've heard of as little as 10-30. You file an eviction notice for non-payment of rent after the 10 day right of redemption. You will need a lawyer. Consider cash for keys too and being nice to the occupants.

Say HI if you see me! :)