HomeSeeker Center

By Don Sieb

There is definitely buying opportunities to find bargains at Foreclosure-Sheriff’s Sale in Everett, Snohomish County. Everyone has seen the late night infomercials about how easy it is to buy real estate at a REO auction and make a quick buck. Perhaps you attended one of the many Foreclosure seminars, sound good does in it?

The reality is that it is not as easy as they make it sound.

Where: Auctions for Snohomish County are held at on the steps in Front of North Entrance of the Snohomish County Courthouse (3000 Rockefeller Ave, Everett, WA.)

When: Auctions are held each Friday morning. Interested Buyers should plan to arrive early; auctions usually start at 10:00AM.

Learn Everything You Can So You Are Prepared Before An Auction Buyers Beware:

REO property may not be right for you. Many times people chasing REO or auction property end up with BIG problems. A few of the common mistakes are:

• Paying too much for a home at auction because you get into a biding war.

• Be aware of what you buy. At an auction, you are not going to have the time needed to research any other liens that may be recorded against the property. It is common to find most property being offered at an auction, actually have more owed against the home then it is actually worth.

• The other problem with auctions is that the Auctioneer will want you to have cash in hand if you have a winning bid on a property.

Foreclosures at Auction are not always the bargain you may think they will be. Do your research before making any offers. Few foreclosures actually end up as a successful sale. If the property does not sell, this is when it goes back to the bank and becomes a Bank Owned Property, REO (Real Estate Owned).

Tips for Buying Foreclosures at an Auction

Step 1: Search for Properties Available

The first step in the process is to search for properties that are available. Legal Notices are posted at Snohomish County Court House, and appear in newspapers such as the Herald in Snohomish County. The available properties are listed in the legal section of the newspaper (Notice of Trustee Sale). Legal Notices will describe property using a legal property description but usually includes a street address. HomeSeeker Center recommends searching for foreclosures at Foreclosure Lisitng.com http://www.foreclosurelistings.com/list/WA/SNOHOMISH/. Note: Using services such as Foreclosure Listing requires membership fees; however is an excellent resource to search for foreclosures. It might be a good idea to contact a Title Company or contact Home Seeker Center for assistance.

Step 2: Confirming the Auction Status, Location and Bidding Procedure

After a property is scheduled for auction, the owner has a chance (typically less than a month) to stop the auction by paying the amount owed to the foreclosing lender. It's also not uncommon for auctions to be postponed without a new date being published. Although cancellations and postponements are announced at the time and location of the originally scheduled auction, you can call the trustee to find out beforehand. Most auctions are at a public place in the same county where the property is located. In many states, all the auctions in each county are at the same location. The auction location is usually listed online or you can typically get the location from the trustee or the county clerk. If you call the county clerk, make sure you clarify that you are looking for the location of mortgage foreclosure auctions, not tax foreclosure auctions.

Step 3: Drive by the Property After you find a property online,

It's a good idea to drive by the property to get a better idea of the property's condition and the type of neighborhood. For some buyers and investors, driving by the property has also facilitated a casual meeting with the owner (you may be able to still work out a last-minute deal before the auction) or yielded a wealth of unexpected information from a talkative neighbor.

Step 4: Understand the Bidding Procedures

The bidding procedure varies from state to state, so you should become familiar with the procedure in your area before bidding at an auction. Consumers are encouraged to visit Snohomish County Auditors website to research property information. In Washington, bidders are required to bring the full amount they want to bid in the form of cash or cashier’s check to the auction. If you get a friendly representative when you call the trustee, you might be able to get information about how the bidding works in your area, but in most cases you’ll need to educate yourself. You could also contact a local real estate agent or attorney in your area. Of course, the best education will come from simply observing a local auction.

Step 5: If you Need Financing…Make Arrangements

Before the Auction Determining your bid amount is more important in states where bidders are required to bring the full amount in cash or cashier's check to the auction. You won't even be qualified to bid if you don't meet that requirement. If you don't have that type of cash lying around, you have a couple options. If you own a home, you might be able to take out a home equity line of credit, which is a cash loan. If you can't secure a cash loan, you may consider buying a pre-foreclosure or bank-owned property, which usually require only a regular mortgage loan secured by the property being purchased. HomeSeeker Center (HSC) is dedicated to providing resources to assist Buyers in making informed decisions. The Mortgage Resource Center is designed to help Buyers understand the financing options available today and to address questions you may have. For more Information please click on this link: Mortgage Resource Center

Step 6: Researching the Potential Bargain

You need to find out as much as you can about the estimated market value of the property, how much is owed on the property and if the owner has any other liens against the property. HomeSeeker Center provides a Market Watch Tool that should help you understand what’s happening to home prices within a certain zip code. Zillow.com is another resource that may be useful.

If there are outstanding liens on the property, the winning bidder at the auction may be responsible to satisfy these liens in some cases, so it's important to check for any liens and the priority of the liens before you bid at the auction. A real estate attorney or title company can check for liens, or you can check directly with county records. The priority of a lien is usually determined by the date it was placed on the property. So a first mortgage will usually have the first priority, and all other liens will be considered junior liens. In most states, the public auction clears out any junior liens, but there are exceptions such as tax liens, which typically will continue to be in effect after the auction. The opening bid at the auction is based on the total amount owed to the foreclosing lender and may include fees incurred because of the foreclosure proceedings. If no one bids above that amount, the foreclosing lender will take possession of the property. It's important to know this amount so you can determine if the auction represents a potential bargain purchase when the opening bid is compared to the property's market value.

Step 7: Determining Your Bid

Based on all the factors used to determine the potential bargain - and your financial capability - you'll need to determine how much you can and should bid at the auction. By setting a firm ceiling for your bid, you'll avoid getting caught up in the heady auction atmosphere and overbidding, which can result in little or no bargain for you. A reasonable purchase amount at auction is at least 20 percent below full market value, and much better deals are often possible. Other factors to consider are the rate of real estate appreciation in the area and the potential for increasing the property's value by making repairs and improvements.

Step 8: Bidding at the Auction

Call the trustee the day before or the day of the auction to check one last time if the auction has been canceled or postponed. If an auction is postponed, the trustee should provide the new auction date. Arrive at the auction location early and locate the auctioneer as quickly as possible. Bidding at an auction can be intimidating, especially if you've never done it before. Take as many cues from the other participants as you can, but don't let them dictate how much you bid. You may encounter investors who attend many auctions every month and who don't necessarily appreciate new competition.

Step 9: Taking Ownership

If you are the winning bidder, make sure you get the necessary documents from the auctioneer to verify that you are the winning bidder. Clarify with the auctioneer and a real estate attorney what further steps need to be made before you take ownership and possession of the property. In some states, ownership can be transferred immediately or within a few days. In other states, you may need to wait a month or more for the sale to be confirmed by a court. Some states have redemption periods for the owner, in which case the owner can buy the property back from you if they pay the full amount paid at the auction, plus applicable fees. You should avoid spending money on repairs or improvements during the redemption period. If the trustee does not evict the current owners, you may be responsible to do this. If eviction is necessary, you can contact a local real estate attorney or the county sheriff for the proper procedure.

ABOUT US HomeSeekerCenter.com (HSC) is a one stop resource that provides vital information about the Puget Sound Real Estate market. The company provides a stable platform for consumers to search for property that reflects the best values in the housing market today.