Court House Auction

[Susan Capeta]

I've been looking at mls for houses to flip, but in los angeles there isn't a lot of deals. I want to go directly to the court house for auctions. Anyone know when the next one is and how the process works? 

Can I get good deals still at these auction and are the auctions not on the MLS?

[Marcello Di Gerlando]

@Susan Capeta

Each state has its own regulations regarding "courthouse" auctions. Being from Colorado I cannot speak to California specific rules. However, from what I understand many of the same components are very similar.

The information you are looking for is public knowledge. Take a trip to the county court house and ask around. You should find a list of properties scheduled for auction. There are services that pull this data that you can pay a fee for. As @Juan Carlos Quiroz Zolezzi points out property radar is one of them.

I pull data directly from my county web site for free sitting in my pajamas.

The courthouse properties for auction are technically all pre-foreclosure; if no one bids and buys, then the property deeds back over to the lender who is foreclosing. The properties then become REO.

Court house auctions are a cash game - you will need a cashiers check or green backs to win a bid at the court house auction. Apparently, some states allow for funds to be delivered within 72hrs or some other time period. Not sure if California allows this.

The Banks set the opening bid - which is typically very close to what the lender is owed. often banks will take a deficiency to the full amount; in other words the bank will take a loss. Don't expect bids to open at zero.

Can you find deals at the auction? yes and no. most of what I see are not deals. Maybe 4 out of 10  have some equity in them but very little. 1 in 10 has a decent margin. All will get bid up fiercely.

Auctions are a spectator sport, spend sometime watching and learning.

Beginners who think they understand the auction process will lose in a big way when they don't know how to do their due diligence.

You have to ensure you are buying the first position lien. Junior seconds and thirds will go to auction---if you buy a junior lien you will not have the deed to the property, you will simply have the rights to a non performing loan. ouch! It happens.

All this might sound a little negative but I love to buy at auction I enjoy the process - Once a week,In less than 20hrs, I will run through a list of 20 properties narrow it down to 4 or 5 do drive buys, look in windows, ask a lot of questions, pull reports to check for encumbrances, run my numbers and then head to the auction the next morning and bid on my favorites. To be sure, I lose more than I win because I will never over bid. If I want to pay retail I will go to the MLS.

Good Luck