We all have heard terms thrown around such as; Foreclosure, Trustee Sale, Court House Steps… This all conjures up in my mind visions of a bunch a people standing around waiting to bid on their favorite property, elbowing each other for position so they are poised to jump in with their bid when their property is on the block. Truth be told, 80% of the homes that go through Foreclosure end up being sent back to the bank. Buying at a Trustee Sale is a complicated process and is best handled by a service company that is going to charge you anywhere from 2% of the purchase price to a flat fee of $3,000.00. This is not rocket science, but a tremendous amount of due diligence and research right up to the moment of the auction must be done. If not researched properly you can make a very costly mistake. This is best left to the professionals.
Who are the players that you will need in a transaction such as this? A Trustee Sale Service Company which will handle all the nuts and bolts of researching and bidding for you and a Competent Realtor who can help you assess the true market value of a property, so you don’t over bid.
How much Cash do I need on hand? You will need $10,000 cash in certified funds as earnest money which is non refundable. The balance of the purchase is due by 5:00pm the following day in cash (certified funds)
Can I inspect the home first? No, you will buy it AS IS and it may even come with house guests. You would then need to politely ask the guests to leave and would most likely have to offer them some cash for keys to the home. It all just comes with the territory.
Some serious evaluation needs to be done to determine whether it is worth buying a home through the trustee sale or to just pursue a Lender Owned home. A lender Owned home is really just one that passed by “the Courthouse steps” but didn’t make it to auction. One main difference in purchasing a lender owned home is the bank has already removed debris, cleaned up the landscaping, cleaned up the title, filled the pool, moved out the guests etc. It all depends on what you plan to do with the property. Food for thought anyway, right? If you have an interest in buying either through the Trustee sale or on the traditional market let me know as I can help you.