What If I Find The Home I Bought At Auction Is Simply Not Worth Renovating
Its simply not possible to know all that is wrong with a property before you purchase it, even if youve had the opportunity to conduct a thorough home inspection. If you purchased the property in your own name, as opposed to purchasing it as a business asset, youll be on the hook for upcoming property taxes, and refinancing wont happen.
And thats why real estate auctions are NOT a recommended way for inexperienced home buyers to purchase real estate.
Property Condition And Inspections
A house could have all kinds of problemsremember, it used to belong to someone who couldnt afford the mortgage or the property taxes, so the owner probably could not afford any routine maintenance or repairs, either. Furthermore, once the loss of the home appeared inevitable, the owner may have intentionally neglected it or even seriously damaged it. Also, a vacant property may have been vandalized or occupied by squatters.
Assume that if the property looks terrible from the outside, it probably looks terrible on the inside. Auction properties are sold as is, and you will need to be able to afford any and all repairs. Tempting though it may be, you should not trespass to get a better idea of the propertys condition. You may have seen flippers on TV entering backyards, peering in or even climbing through windows, but doing so is illegal, and you definitely dont want to disturb anyone occupying the home, not only out of courtesy but also for your safety. Seek information about the propertys ownership history from local government records, talk to local real estate agents, and respectfully request information from neighbors.
Even if you can get a home inspection, that still has its limits. Problems behind walls, in ceilings, and under floors might not be apparent until you take possession. If the utilities are turned off, you may not be able to detect leaks, electrical problems, broken appliances, or malfunctioning HVAC equipment.
Where Can I Find A Listing Of Fdic Real Estate
The latest inventory of real estate currently available for sale can be found on the FDIC Real Estate For Sale web page at . It is subject to change as properties are acquired and sold.
This online listing is intended to provide interested parties with preliminary information only. It is not a solicitation of offers and does not constitute an offer to sell. Information therein is provided for the purpose of inviting further inquiry, and has been obtained from sources believed to be reliable. The FDIC does not distribute hard-copy printed property listings.
What If I Can Buy The Home I Want By Paying Off Second Liens
If a homeowner has defaulted on a second lien, the first lien for the primary mortgage is probably not far behind. Your purchase will always be subordinate to the first lien, which could foreclose and wipe out all subordinate liens.
There are sophisticated investors who know how to make money in these situations, but unless youre one of them, you are best off forgetting you ever saw the listing.
Can I Get Help From A Real Estate Agent
You might, if you have a long-standing relationship with one. The problem is that real estate agents do not make commissions on auctioned properties. If you know an agent who is willing to help you anyway, they can pull comparables in the area, learn about the propertys history, and even help you get a preliminary title report.
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How Does The Fdic Market And Sell Real Estate
Properties are generally sold individually through listings with local real estate agents and/or brokers, who are hired by FDIC real estate contractors to assist in the marketing and disposition of properties on behalf of the FDIC. Occasionally, the FDIC conducts open outcry and online real estate auctions.
All properties are sold on an as is, where is, with all faults basis. The FDIC makes no guarantee, warranty, or representation, express or implied, as to the location, quality, kind, character, size, description, or fitness for any use or purpose, now or hereafter with regard to any of the properties listed.
How Buying A House At Auction Works
The benefits of buying at auction include expanding your options and possibly purchasing at a discount. You may face less competition to buy an auction house compared with buying in the traditional way, but you will also be dealing with a different pool of potential buyersoften, experienced investors.
Perhaps the biggest risk of buying at auction is that you will have limited knowledge of the properties for sale, making an expensive misstep a real possibility. Also, as with any real estate purchase, you will need to read, understand, and sign lots of paperwork .
Real-estate lore is rich with tales of homes bought at auction for well below , and such bargains do exist. However, auctions are typically a riskier way to acquire property than buying through the usual process. That reality makes it vitally important to be well educated as to how real estate auctions work and prudent about the properties you consider bidding on.
Many people incorrectly believe that auction homes are a good deal, says John Myers, a real estate agent and qualifying broker with Myers & Myers Real Estate in Albuquerque, N.M. Some auction homes are a good deal, and others can be a big mistake.
To help you avoid making a big mistake, here are the basics of residential property auctions, so you can decide if this option might work for youwhether you want to live in the property or use it purely as an investment.
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Finding Real Estate Auctions
One way to find auctions is by contacting local governments directly or visiting their websites for information and then following up by phone to confirm the details. Another is through sites such as RealtyTrac.com and Auction.com. However, online information is not always accurate.
Properties may be listed that are in pre-foreclosure, because the owner is behind on payments. These properties may never go up for sale because their owners catch up on payments or come to an arrangement with their lenders.
Local real estate agents and brokers can also be valuable resources. Unfortunately, you may not find them eager to help, because agents and brokers do not automatically earn commissions on live auctions. However, these realtors can earn commissions through online auctions.
Where Can I Find More Details On Fdic Real Estate
The online listing for each individual property owned by the FDIC will typically include the name, phone number, and e-mail address of the local real estate agent and/or broker, and the FDIC real estate contractor. Any of these parties will be able to provide more details on any property of interest.
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How Do Auctions Work
There are a variety of different auction companies, and every one of them has their own rules. Even within one auction company, there may be a variety of auctions being offered. They must also conform to the rules of the state and municipalities in which they are located. Make sure you understand the rules of the specific auction youre interested in before you bid.
Tips For Participating In Government Auctions
The general rule for auctions is that the highest bidder wins, and cancellation is not possible. Check with the auction site ahead of time to find out if you can cancel a bid.
Each auction website operates differently. In some cases, the government agency itself runs the auctions. In other cases, the agency operates the shopping site, but a third-party company handles the auction itself.
Find out what forms of payment auctions accept. There is no uniform payment policy across all the different auctions. Some auctions accept credit card payments or personal checks. Others, such as the Internal Revenue Service , don’t accept either of these. Most auctions accept cashier’s checks.
For real estate auctions, you may need to work with a broker or real estate agent to bid or make the purchase. Also, for real estate auctions, find out if financing is permitted. Many times it is not and the full purchase price is due when you win the bid.
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New York State Surplus Real Estate Auctions
The OGS Division of State Asset and Land Management sells real property, either at public auction or by sealed bid, that is no longer useful or necessary for state purposes. This includes vacant land, and residential and commercial real estate.
|Walter J. Mahoney State Office Building, Buffalo, NY
Section 33 of the Public Lands Law provides direction on how to dispose of unappropriated state lands. Prior to disposition, a property must be found to be surplus to the needs of the jurisdictional agency, and then “abandoned” by the agency to the Office of General Services . OGS polls other state agencies or municipalities for interest prior to offering the property for public sale. If there is no interest, OGS initiates planning for the sale of the property.
Surplus real property sales are made through either open auction or sealed bid auction. Sealed bid auctions are used for those properties where there is limited interest. Prior to the sale, the property is appraised and a minimum bid set. The public auction process generally begins with bidder registration, which usually occurs a half-hour before the auction begins.
General bidder requirements*:
All bidders must bring a deposit check for 10 percent of the minimum bid in the form of a certified check or bank draft made payable to themselves.
*See the Notice of Sale for each auction as special terms and broker commissions may apply.
Where Can I Find Information On Fdic Real Estate Auctions
Auction announcements can be found on the FDIC Special Real Estate Sales Events web page at. Advertising may also appear in local, regional or national newspapers or other media in each events local and/or regional area.
I am interested in a property that I thought belonged to FDIC. How can I find out who owns it?
If your property of interest does not appear in the latest inventory of FDIC real estate properties currently available for sale at , contact your local county clerk or recorders office, or local title company for information. They can assist you in procuring a copy of the property deed, title, and/or other publicly available documentation to confirm ownership.
If, after that, you need further assistance, contact the FDIC Owned Real Estate Department at or 568-9161, and be prepared to provide the subject propertys name and location, deed or deed recordation, and/or any other additional title documents.
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Check For Any Claims Liens And Occupants
Before you bid, youll want to hire a title search company to see who might hold liens against the property. As the owner, you will become responsible for any liens, which means more money out of your pocket.
There may be other claims against the homenot just tax liens but also contractor liens or a second mortgage. Bidders should check with the auction company to ensure that the property has a clear title. If you do win an auction, youll want to buy title insurance during escrow or immediately after closing to protect yourself against any liens not uncovered during the title search.
In some cases, the owner or a squatter will be occupying the property, and you will have to evict theman often-lengthy process that can be unpleasant at best and expensive at worst. It could be more advantageous simply to offer them several thousand dollars upfront to move out and hand over the keys.
Refrain from doing anything until you hold the title. Avoid the urge to start renovations or move into the property immediately after getting your certificate of sale. You will still need to wait up to 10 days or so to receive your certificate of title. The property is not actually yours until you hold that certificate the owner could still retain his or her right to the home by filing an objection to the sale with the court or by paying off the loan.
Payment Options: Plan Ahead
Buying a property at auction usually requires a lot of cash. Each auction company and county government has its own requirements for payment, but you will probably need cash just to secure your right to bid. Down payment amounts and methods of purchasing often depend on the property and the auction house. More flexible financing options may be available by purchasing a bank-owned property the traditional way.
As for payment, bidders at an auction should bring cash, a money order, or a cashiers check for the sum required by the auction holder. Typically, you will have to pay for the property in full immediately after winning the auction. Occasionally, you may have until the next day to complete payment. Failure to complete the payment may result in forfeiting your deposit and being banned from future auctions. Be prepared to provide proof of funds to show you can complete the purchase. If you are bidding as an entity, such as an LLC, a trust, or a limited partnership instead of as an individual, you may need to show your entity documents.
Also, be sure that you understand the auction fees you will be expected to cover. Homes purchased at auctions many times have costs and fees from auctioneers, banks, attorneys, and other companies required to bring the property to the auction, says Humes. It is not uncommon to find 10% auction fees, bank interest and penalties, attorney fees, 12% sale carrying fees, and property preparation fees that are passed on to the buyer.
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Properties For Sale In Chemung County Real Estate Auction
CHEMUNG COUNTY, N.Y. Chemung Countys second real estate auction of the year is now live with over 30 properties up for bid.
The Chemung County Owned Real Estate Auction went live on December 6 on Auctions International. There are a total of 37 houses and lots up for bid.
The rules for registration and a list of all the available properties in Elmira, Horseheads, Southport and Van Etten are available here. The auction site is available by bidding is open through December 20.
Chemung Countys last real estate auction ended on August 17, 2022. Several locally-known buildings were sold, including Rossi Lanes, the former Morettis restaurant, and the home involved in the Chemung County Torture-Murder Case.
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Sealed Bid Contents Auctions
All contents on the premise of an estate property are sold in As Is condition at time of Sealed Bid Contents Auction. The Public Administrator makes no representations as to authenticity and/or value. All contents and sealed bid auctions are conducted and overseen by the Public Administrator of Nassau County. Appointments must be made 24 hours prior to the start of the auction. Once the Nassau County Public Administrator has notified the successful bidder, the bidder has five business days to confirm the bid with the NCPA in writing or the original bid is deemed null and void. After the successful bidder provides written confirmation, the bidder must submit payment for the bid to the Public Administrator of Nassau County within five business days of confirmation or the original bid is deemed null and void. When the payment has been made, the bidder has thirty business days to empty out all or partial of the contents of the property.
Please do not contact the Nassau County Public Administrator to schedule an appointment. All appointments MUST be scheduled by clicking on the hyperlink below, completing and submitting the form.
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Multiple Listing Service Data
Direct multiple listing service reports are far more valuable to potential buyers than online listings, according to White, because they contain the full data for the listing, including photos and, most important, nonpublic broker comments. Non-public comments are important because they specify critical information impacting sale price and days-on-market, says White. This information can cover property defects, financing options, occupancy, and tenant leases.
The best way to assess an auction property is to work with real estate agents, appraisers, and contractors. These industry representatives understand construction and remodeling costs and can accurately estimate the propertys value and the cost of the work it may need.
While rules vary by location, MLS and county records are often only available to real estate licensees, according to White. In his experience, they are usually happy to help free of charge if you contact them.
White also notes that in-person auctions have been disappearing because even smaller counties have been moving them online. Miami and Palm Beach are two locations where both tax and foreclosure auctions are now fully online.
Keep in mind that foreclosure auctions are often postponed or canceled, even at the last minute. The lender might not have obtained all the paperwork it needs, or the borrower may have worked out a solution to avoid foreclosure.
What Bidders Need To Know
Before bidding at a real estate auction, you should understand the risk you are taking. A bad purchase could haunt you for years. You also need to understand the auctions rules and be prepared to follow them before trying to participate.
You will have to register and submit a refundable deposit of 5% to 10% of the propertys expected selling price to the entity holding the auction. If the auction is in person, be sure to check in at least an hour before the scheduled start and obtain an official card, which you will raise when you are ready to bid.
Winning a property at auction can work in two different ways.
- In a lender confirmation auction, the lender does not have to accept your offer, even if you are the highest bidder.
- In an absolute auction, the winning bid gets the property.
The starting price of the auction may be the balance owed on the mortgage or a lower amount designed to spur bidding. In a foreclosure auction, the lender is not allowed to profit from the auction. Often, these properties are sold at a loss if there is a profit, it is supposed to go to the foreclosed homeowner after the mortgage and any other liens are paid. Auction properties are not always great dealsfor example, the auctioneer could set a hidden reserve price on a property, which is the minimum that must be bid.
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