What does a foreclosure auction look like? How many realtors have attended one? My guess is the percentage is low. Yet our clients want to know more about buying a home at auction. I’ve been wanting to attend an auction just to see the event and potentially learn more. I’ve even followed a few properties in the near vicinity which were up for auction, only to hear (in some cases over and over again) that the auction was cancelled or postponed. So like many of you, I’ve never attended one --- Until Monday of this past week.
I have a client who was watching a property in foreclosure and did try to attend an auction almost a year ago, only to hear it was postponed. The home (a condo unit) has sat vacant now for over two years.. They live in the complex as a renter and has been trying to purchase a unit there. Well last week we got word that the auction was back on – In truth she should have known as she gets the paper where it was posted – as required – in three separate issues – Yet she heard about it via the grapevine – Does anyone read those required newspaper postings? With less than 48 hours before the auction – it was too late for a thorough title search – We did what we could researching the property and liens via the Registry of Deeds. We visited the town hall and got info on whether the taxes and other town bills were up to date – We were able to get info on the condo fees and whether they were up to date so we were ready for the formal auction.
Hear Ye Hear Ye Hear Ye – is about what I expected – As the auction started outside the complex, I expected the auctioneer to be unapproachable and too busy to spend time with a neophyte like me. But that was not the case, he was more than willing to answer my questions. There were 6 or 7 bidders out there and all seemed to know the auctioneer. I was told they were all working for investors and their bids were all lower than what the bank was expecting before it would take back the property. The auctioneer asked us what our bid would be – I asked for the minimum bid (which was over our planned top number but not by much) - Long and short of it, we decided to come up to minimum plus $100 and the Memorandum of Sale was filled out – It was all over in 15 minutes – very anticlimactic for me! But my buyers were relieved.
I believe the property sold somewhere between 10-20% below market value - At this point the buyers are working with a real estate attorney to wrap up the loose ends. This was too easy. Should we expects more bumps along the road? I know liens can be posted up until Close - But how often does that happen when a home has been vacant for so long? If you’ve had some experience with a foreclosure auction – I’d like to hear your input!
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