Anyone know anything about real estate auctions?
real estate auctions. We have been looking for a house for about a year and a half, and I think this might be the one. It isn't a foreclosure or sherrif sale or anything like that. The woman who lived there is about 185 years old, and I think they are just looking for a final sale. We went through the house and met the son, uncle, aunts, nephew... they were all there - very nice people. This is what I know so far: there is a reserve for the auction, and I can't find out what it is. There are other household things being sold that day, just before the property sale. I know what the taxes for the property are, room sizes, and house details. This house is going to be very much in demand due to the real estate situation in my area. I am very excited that this opportunity has come up, but I am terrified that I expect to be outbid. I am willing to beg borrow and steal to get this house, and I can't imagine anyone else wanting it as much as I do, but my finances are not unlimited. What do I need to know about auctions? Are there any great tips? Is there a strategy to bidding? Am I certain to lose this house or is there someone out there who can suggest a back up plan? The house is really great in my eyes. Everything that I would do to it is totally superficial, like carpet, paint, kitchen counter.... but I can certainly live with it the way it is. Nothing needs to be changed in order to move in. In my heart I am hoping nobody else can see past the outdated decor, that works to my advantage! Does anyone have any auction experience? I have about 3 weeks to learn everything there is. Searching the web produced nothing helpful, just junk sites. Shellie |
|
|
| I go to auctions, but haven't gone to a real estate auction.
All that you mention sounds very typical. Have you checked into legal stuff - no liens, clear land title, stuff like that? I would go into it with a set budget - a maximum figure you will not exceed. It gets kind of addicting and can get caught up in the moment of excitement! Good luck.  |
| Real estate auctions can be a good deal or can turn bad. One problem with buying a property at auction is that it is "as is". There is no home inspection to go through and no recourse if you find there are problems later. The other issue is that when buying at auction you don't have the opportunity to research to see if there are any liens or contracts, sometimes clear title can be a BEAR.
I would very leary of an auction property, I always wonder WHY they are selling property at auction rather than listing it. Sometimes it is as simple as wanting to sell fast, other times it's because there are problems they don't want to reveal. If you are allowed to I would definately have someone, a professional, inspect the house top to bottem prior to the sale. If the house is one that is in high demand then odds are you aren't going to get a great deal, you might be better off going through a conventional sale. My Uncle buys houses at auctions (foreclosures, estates etc) and then fixes them up for resale. He has done pretty well but always figures on putting at least twice as much as he paid for the property into to "fix it up" for resale. If you are handy and can do alot of work yourself then it could be a good deal. You can't even worry about the reserve you just have to decide how much the property is worth to YOU and bid that much. It isn't unusual for people to set such a high reserve that the house doesn't sell and they end up lisiting it anyway. That happened last fall with a house next to our firs house. The fire dept thought they would like the land for future use and bid on it only tho find that NO ONE met the reserve, it's been listed all summer and still hasn't sold |
| How exciting!
Is this a sealed bid auction, or a live auction with re-bids allowed? When is the auction? In addition to an inspection prior to bidding, you'll need to check with the town for any outstanding taxes and other municipal liens, and you'll need to have a title search performed. You should have your financing all arranged with a commitment letter (I think that's the right term, not just a pre-approval) before bidding. |
| ...perhaps you should contact some real estate attorneys and find one who is familiar with the process of bidding on a house auction, and can appropriately advise you.
Then after you've won the house for pennies on the dollar (of course) come back and share your newly gained knowledge!  |
| Here's some other things you need to know:
1. Contact the auctioneers and register yourself as a bidder. Sometimes they have specific qualifications you will need to meet before you can become a bidder. 2. Ask what the buyer's premium is on the property. This is a percentage you will have to pay on the purchase price if you are the winning bidder. 3. You will need a commitment letter from a mortgage company or bank if you will be doing a mortage and/or a letter of credit from a financial institution. 4. You will be technically be paying in cash at the end of the auction which is why you must have #3 in place. 5. Do not bid until the bidding slows down and the auctioneer is into his final selling speech. You will then know if the property is still within your price range, and you will know exactly who you are bidding against. This eliminates the chance of any "rigged" bidding. 6. Usually the reserve on the house is really high and it probably won't sell. However, if you are the high bidder they will normally come to you and see if they can make a deal with you. 7. Do your homework. Find out exactly how much homes of that size and style sell for in that area. Do not go by real estate listings or agents - go to the clerk of courts office or tax registry office and you can find out how much property has sold for in that area. Joe (Not Wynette)  |
| Ok, I know a little more now.
First, I was able to inspect the property, and I have an appointment to see it again in 2 weeks. The auction is in the first week of August. It isn't a sherrif sale or forclosure, and I was told there are no problems with the title, no leins, etc. but I will be calling the lawyer tomorrow, and I am assuming if there are any problems he will have to tell me. (I could be wrong on that.) The terms are 10% down day of auction balance within 45 day at closing. Buyer pays 2% transfer also. We have been looking for a house in our town for well over a year so fortunately I do know what the houses all went for. I am obsessive about it really, it's kinda sick. (There haven't been that many either, I could probably count them on my hands.) Thanks so much everyone - (especially Joe) you have given me much more to consider. I do still want this house - and lucky me I am quite handy and can handle all the minor remodeling. I will be glad for any other info anyone can offer! Thanks again everyone Shellie |
| You can find out if there's a mortgage on the house at the registry of deeds (*cough* as part of that title search *cough*). It might be nice to know what the mortgage is/was, if any.
I'm not sure I'd trust their lawyer about anything. He is not, repeat NOT on your side, AT ALL. He works for them. You NEED your own lawyer on this one, IMHO. |
| I was able to search the paperwork online, for a few fees.
First I had to pay for the time I used and then for the documents I chose to buy. The problem is, some of these are confusing and I can't exactly tell if the debts are satisfied. You'd think they'd be pretty standard, but I think there is some slight variation depending who at the courthouse entered the info. I think it has to do with coding and the fact that a lot of this took place long before they were computerized. I don't know if most areas do this now or not, but this was all available to me online! Fortunately I had done this sort of thing for my neighbor a few weeks ago or I'd never have been able to find it. Quite a confusing bunch of links, most of which lead nowhere. I guess I'm going to have to find my own lawyer after all, or I run the risk of misunderstanding these documents. Shellie |
| Hi Shellie, good luck with all of this! Are you staying in the same neighborhood?
If you guys win this auction, I think you should hire a lawyer right away too to make sure everything is okay and to help handle the paperwork correctly. |
| Yes, it's in this area - same school district, but outside of
town. It's in a small cluster of houses surrounded by corn fields. It also has well water, which I have never had. I know there is something about that I should know, but here again, I really don't know who to ask.  I have always been
in town, small town yes, but public water so this is new too. Shellie |
Shellie wrote: Yes, it's in this area - same school district, but outside of
town. It's in a small cluster of houses surrounded by corn fields. It also has well water, which I have never had. I know there is something about that I should know, but here again, I really don't know who to ask. I have always beenin town, small town yes, but public water so this is new too. Shellie Really nothing to having well water ((( unless of course it's contaminated...  ))) We used to have well water & septic when we lived in the woods. All I remember is having to add these large salt pellets every now and then to the tank and you can buy it at your local hardware store. |
| I have had well water (and septic) my whole life. Well, except for when I was in college. It is the best! I really can't imagine paying for water.....
We periodically have the water tested, but nothing else is needed. (Unless the well goes dry, pump goes out ) |
| I pay just over $100 a year for my town water, and I am on a septic system. I can't imagine running a well and pump and storage and testing and softeners and filtering and whatever else on $100 a year.
I wish I was on town sewer (it's not available), but I'd probably be paying $1200 a year or more for that. |
| Actually, I had forgotten until I read these last posts
that we had a well and septic at our summer home. DUH! I can't believe I forgot that - I'm scatter brained. I guess the water situation freaks me a little because if it goes dry or the pump goes it's big bucks to fix. I know lots of people live with it and never give it a second thought, but it's an "unknown" to me. I was a still pretty young, and it wasn't a home we lived in year round so I never thought about it then. I pay about $40 a month for water, and our sewer bill (which is attached to our garbage bill) is based on water usage. Anyway, I guess if we get the house I'll have to deal with well water. There are fairly new water softener and water heater there already. I am very interested in having solar panels asap, no matter where we end up moving. So that is a big consideration for where we move. (but this house is sort of perfect for that) So I guess if I have well water, and solar panels, I should be able to save up for the dry well and the dead pump. 
Shellie |
| Ron, had a very good idea about a preliminary title search.
Out here in the West we have title companies that facilitate transactions. They can run what's called a property profile which gives a very large amount of information about a property. Maybe you have a title company or a real estate attorney that could provide that for you? Or a real estate agent. I would think if you contacted a REALTOR they might be willing to help you with information. Sometimes it is very true that what you don't know can come back to bite you. And how things are done can vary greatly by region. I was told tax liens don't go away. Can you contact the company running the auction and ask them for help and information? It is amazing how many people will help you if you call them and are nice. Another thing when you are researching the prices of sold properties, sometimes the seller gives a contribution to the buyer that is not noted in the Sold record. Also, don't be surprised if you are relying on word of mouth sellers do not always tell the correct amount they received for their property. Plus there is sometimes a large difference between what a property may be advertised for and the actual selling price. I'm just curious if you've been looking for property for so long have you consulted a REALTOR? Many REALTOR's have what's called pocket listings and know about properties that might not be on the market. They also can help with the disclosures so you know exactly what you are buying without surprises. You can get a lot of help in areas you may not know you should know about specific to your geographic location. If it has a well you might need to know if it's a communal well with water rights or if the well is on the property itself. I wish you the best of luck. |
Shellie wrote: This house is going to be very much in demand due
to the real estate situation in my area. I am very excited that this opportunity has come up, but I am terrified that I expect to be outbid. I am willing to beg borrow and steal to get this house, and I can't imagine anyone else wanting it as much as I do, but my finances are not unlimited. Hi Shellie, I'd reiterate the point that you need to know what the house is worth (get an independent appraisal) and set a limit as to how much you're willing to spend. You may be up against professionals - real estate investment groups with lots of money to invest - and you don't want to get yourself into financial trouble in all of the excitement. With foreclosures rising, banks are getting more rigid about the amount they'll finance on a property, and appraisers are not as generous as they were in the past. Good luck! |
| I did actually have a realtor, and I fired him. He left me
hanging for 2 months without so much as a call to say, hey, I haven't found anything but I was just checking in. His office also did not want to be involved with any owner initiated auctions. Why I'm not sure. He was not very forthcoming with the info. Our real estate transfers are all in the paper as public record, and are searchable through our county database, so they are pretty accurate. We are having an appraisal done, but it doesn't have all that much to do with anything. The bank won't care much because we aren't financing the price of the house. I don't want to pay more than a fair price, but for this house I will go up to my limit. We have been looking for a house for so long, mostly because there are so few in our school district for sale. We have found the perfect house 3 or 4 times, but the location is awful or we have found the perfect location but the house is awful. We have found 2 that were perfect all around, but on one the price was just too high and the other sold before it actually hit the listings. Several have sold within 24 hours and I haven't even gotten in to see them. There are lots for sale, but I really don't want to build, plus they start at about 90k. I am looking for "our house" - the one we will stay in for the rest of our days. Maybe I am being picky or fussy, which I think is why my realtor stopped calling, but I will not settle this time for just a "house". Is that unreasonable? I am starting to doubt myself about that. We could have bought any old place a year and a half ago, but then what would be the point in doing that? I have a house, it's just a house, but we never intended to stay here. This whole thing is giving me such anxiety, I'm about to start drinking again.
Shellie |
Shellie wrote: I did actually have a realtor, and I fired him. He left me
hanging for 2 months without so much as a call to say, hey, I haven't found anything but I was just checking in. His office also did not want to be involved with any owner initiated auctions. Why I'm not sure. He was not Shellie Because they were probably not offering a commission to Agents. (If they were, they would have listed it on the MLS and not an auction type deal) Then the Agent would only receive the commission you would pay. Probably not enough money for them.
(When we were buying this house the seller's agent was a complete idiot!!, She had told us this deal was not very important to her as she was not getting enough money on the deal, so she would get to it when she got to it!  )
Can you blame the sellers? They are trying to get the best price...without having to deal with agents, their fees or their attitudes. (I am totally allowed to say this, as I am the holder of a Real Estate License myself, I also sold my home in NY without any agency help and made a LOT more than I would up with their help. ) Lots of luck with the Auction, Shellie! |
| My dad's a real estate agent and they are actually looking to buy a house in their area, but it is so expensive there--I was looking yesterday at saw a fixer upper house that was 900 square feet for $700,000--but those are the prices!
(Now, to potentially answer why the agent's company doesn't deal with seller initiated auctions...)Anyways, so a while back I asked him why he didn't look into foreclosures or auctions, especially since he has a bit of an inside track being an agent...and he said that they just aren't usually worth it. As a whole, a lot of times the houses are in poor condition because the owners have fallen on hard times and couldn't afford (or didn't want to) to keep up the house...And then the really good houses typically sell for higher than they're worth (because of bidding wars). So really, it's hard to get a good deal with this sort of thing. Not impossible, just hard. It's a big deal, so I think it's perfectly fine to be picky--especially since you want this house to be the forever house, not just a stepping stone. Maybe you could talk to a different real estate agent in the area and just see what their opinion is in general of auctions like this, or even about this one in particular. |
Shellie wrote: This whole thing is giving me such anxiety, I'm about to start drinking again. That won't help with getting the financing.
How will the prices in the district hold up if Hershey leaves? |
| Well, I haven't started drinking yet
The whole area is in an uproar over this Hershey deal. Everyone around here knows someone in the situation or works there themselves. I know several people who won't stay in the area if it happens. So, the upside of that for me is there may be a few houses going on the market, in case this auction house doesn't pan out. Right now I'm trying to get my 'ducks lined up'
It's like a scab on my knee, I can't stop pickin at it. Shellie |
| Hi Shelly,
I've been following this post with lots of interest and have learned so much from it. I'm really hoping you get the place and it all works out for you. Crossing my eyes, fingers and legs for you!
Marianne |
| Thanks Marianne (and everyone else!)
I don't think I mentioned -(Marianne reminded me) that one reason this place is perfect is that there is much more property than I have now. There is an out-building and room to run, and the way I see it, that would help me help a few animals who need homes, fostering or whatever. When I mentioned this to Vic, I blamed Marianne and her Noah's ark from a while back. Of course, he
immediately agreed. 
Shellie |
Didn't find exactly what you're looking for? Search again here:
Custom Search
|
|
| |
|
|
|
|
|