Featured Professionals

by Jennifer V-E Johnson

How do I find foreclosures going to auction?
Check the major and local newspapers for auction announcements in the legal notice section. Notices are also posted at the entrance to the courthouse in the County or City where the home is located.

What homes are being sold at auction?
The homes listed are going to auction or "foreclosure sale." The mortgages for theses homes are in default and are being sold by the Lender.

What is default?
Default is failure to make mortgage payments in a timely basis or to comply with other requirements of a mortgage.

Where is the auction held?
Auctions are held on the court house steps of the County or City where the home is located.

Who may attend the auction?
The auction is open to the public.

Is there a fee to attend the auction?
It is FREE to attend the auction.

The price listed is much lower than other homes is the neighborhood is this correct?
The price listed is the principal amount owed. This price DOES NOT necessarily reflect the sales price of the home. The principal amount owed may reflect default on the 2nd mortgage. Foreclosure on the 2nd mortgage is subject to any covenants of the 1st mortgage.

What is the principal amount owed? The principal amount owed is the amount owed on the mortgage that is in default. This may not include any costs associated with the foreclosure such as Attorney fees, late fees and other collection costs.

What is the assessed value?
The assessed value is the value that the County or City has assessed for the home.

Can I preview the home before the auction?
You may preview the home if it is in the MLS (Multiple Listing Service) or is a FSBO (For Sale By Owner). All homes are sold "AS IS." Caveat Emptor.

Do I need a Realtor® to attend the Auction?
We recommend Buyer's Representation for novices. You are entering into a legally binding contract.

Should I have financing before I attend the auction?
If you do not have liquid funds to pay the balance due at the time your bid is accepted, we recommend consulting your Lender PRIOR to the auction to ensure you can settle by the closing deadline. The average closing deadline is 10 to 15 days. If you cannot settle by the deadline YOU LOSE YOUR DEPOSIT!

How do I bid on a home at the auction?
Upon arriving, locate the Trustee or Auctioneer (the Representative for the Lender) for the home you are bidding. Obtain any bidding instructions or information such as cancelled sales. The Trustee or Auctioneer IS NOT there to answer questions on the foreclosure process, stopping a foreclosure or how to purchase a foreclosure. The legal notice lists the name and phone number of the law firm that filed the foreclosure. You may be able to obtain information prior to the auction. If you have additional questions please send them to us at jennifer@washmetromes.com.

What are the terms of sale?
A predetermined deposit amount or 10% of the sales price, whichever is lower, CASH or certified check is required at the time of sale. Additional terms may be announced.

Who should I make the certified check payable to?
We suggest making the check payable to yourself. This will allow you to endorse the check over to the Trustee or Auctioneer if you have the winning bid.

How much is the opening bid?
We advise our Investors to calculate approximately 15% to 20% over the principal amount owed as the possible opening bid. The 15% to 20% increase reflects Attorney and Lender fees. A Realtor® or Appraiser can provide comparable sales for an estimated value.

If I have the winning bid what happens to my deposit?
Your deposit is held by the Trustee or Auctioneer in an escrow account until settlement occurs. Your deposit is returned to you after the auction if you do not have the winning bid.

What if I can't close by the deadline?
If you do not close by the deadline, YOU LOSE YOUR DEPOSIT!

Can I buy a home if the auction date has passed?
Yes, if the home was not sold at auction.
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Copyright© 2007 by Jennifer V-E Johnson. Others may not copy this material without written permission of Jennifer Johnson. The views expressed in this RE News are those of the author(s) and do not necessarily reflect the official policy, position, or opinions of RE/MAX or RE/MAX Gateway. If you are currently working with a Realtor® to sell or purchase real estate this is not intended as a solicitation.

Published courtesy of Dixie Randock, A+ Institute