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FAQ: Do I need a pre-approval letter to bid on a trustee sale?

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Industry Observer with Retired

Do I need a pre-approval letter to bid on a trustee sale?

As the real estate market firms up in the Maryland suburbs of Washington, DC, we are receiving more questions on trustee sales that take place at the county court house in each Maryland county.

No, prospective buyers do not need to have a pre-approval letter from their mortgage lender in order to place bids at trustee sale auctions.  The auctioneer or trustee will probably ask to verify the funds that will cover the required deposit.

From the perspective of the seller, trustee sales are cash transactions.  They do not care about your financing.  The risk of financing is a burden of the purchaser.

Dahlia, Kentlands, Spring Flowers IMG_0964

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

Posted by

Roy Kelley, Retired, Former Associate Broker, RE/MAX Realty Group

Gaithersburg, Maryland  

Show All Comments
Roy Kelley
Retired - Gaithersburg, MD

It is always good to receive your comments.

Have an outstanding week, with your camera in hand.

May 29, 2012 01:18 AM
Barbara Hensley
RE/MAX Properties - Rockwall, TX
Homes for Sale in Rockwall County, Texas

Roy - this is good information to know.  Have an awesome week in your neighborhoods! 

May 29, 2012 06:34 AM
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Roy I believe you have nailed it on this one, right down to the details and the path to take.

May 29, 2012 09:01 AM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I like your FAQ series.  I have gone to a number of Trustee Sales and they are a whole different ballgame than a regular purchase, or even a short sale or foreclosure that is listed on the market.  There are risks and a buyer definitely needs to know what they are getting in to.  -Kasey

May 29, 2012 02:27 PM
William Johnson
Retired - La Jolla, CA
Retired
Hi Roy, Great information and a goood job answering the question clearly and simply for the benfit of the consumer interested in Trustee sales.
May 29, 2012 03:33 PM
Roy Kelley
Retired - Gaithersburg, MD

Thanks so much for your comments.  Real estate professionals that want to be local experts need to be able to explain the foreclosure process in their markets. 

May 30, 2012 12:28 AM
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired

Hi Roy,

In our area it is strictly cash only. You have to show your cashiers checks before you are given a bid paddle.

Phil

Jun 03, 2012 08:38 PM
Bill Fields
Bill Fields Learning Systems - Treasure Island, FL

Roy, seeing more and more in Florida. Thanks for the insight.

Jul 28, 2012 11:03 PM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Roy, in Florida, we have been told it is cash only.  How long with they wait for the funds in Maryland?

Jul 28, 2012 11:18 PM
Roy Kelley
Retired - Gaithersburg, MD

Thanks so much for your comments.  It is always good to hear from you.


Have an outstanding week with your camera in hand.


Daylily, Kentlands, Summer Flowers IMG_2901

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

Jul 28, 2012 11:59 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Roy,

Those sales are not for the faint of heart or pocketbook.

BTW, I always enjoy your lovely flower pictures. Do you garden too, or just spy them while going about your business.

Jul 29, 2012 12:40 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

I would only go to a trustee sale if I was a very serious buyer whit a wad of doe in my pocket.

Jul 29, 2012 03:53 AM
Todd Anderson
You In Park City group - KW Park City Keller Williams Real Estate - Park City, UT
Park City | Deer Valley Real Estate

Interesting; here buyers are required to present a cashiers check to bid and then are required to bring the rest of the funds in 24 hours. I don't know of a bank that could perform under those circumstances which means we are effectively a cash only sale at the courthouse steps,

Jul 29, 2012 04:04 AM
Michael J. O'Connor
Diamond Ridge Realty - Corona, CA
Eastvale - 951-847-4883

In California, certified funds for the full purchase price is required IMMEDIATELY once the final call is made.  No opportunity to go through a financing process at the courthouse steps!

Jul 29, 2012 05:41 AM
Damon Botticelli
Vegas Real Estate Photography - Las Vegas, NV
Real Estate Photographer

Here in Las Vegas, you have to pay in full on the spot if you are the winning bidder.  You have to show the cashier's checks before you can even bid.

How long does the buye have to produce the full purchase price in MD?  How much of a deposit do they need at the auction?

Jul 29, 2012 06:22 AM
Roy Kelley
Retired - Gaithersburg, MD

Your comments are always welcome.  Prospective purchasers should fully understand trustee sale procedures before submitting bids on available properties.  In Maryland, the trustee can set the amount of the required deposit which is usually in the range of 10% of the loan amount.

It takes a minimum of thirty days for court approval and settlements then take place in accordance with the advertised terms of sale.  Since the properties are sold in as-is condition, mortgage financing may not be readily available for some purchasers.

Kentlands, Summer Flowers IMG_2909

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs



Jul 29, 2012 08:59 AM
Jon Quist
REALTY EXECUTIVES ARIZONA TERRITORY - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

The trustee sale comment is a good one. Since most buyers are experienced investors using cash, financing is usually not an issue.

Jul 29, 2012 04:57 PM
Roy Kelley
Retired - Gaithersburg, MD

Good Saturday morning to all. Have a great day and an outstanding weekend.

Jan 28, 2017 07:39 AM
Roy Kelley
Retired - Gaithersburg, MD

We have beautiful weather for home buyers to look at homes in Kentlands. Many will wish they had a larger selection.

May 02, 2017 05:22 AM
Roy Kelley
Retired - Gaithersburg, MD

Good Sunday evening to all. Have a most productive week.

Jun 18, 2017 06:06 PM
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