The REO Squad's Auction Advantage
Buying Property at the Courthouse Steps
Buying property at the courthouse foreclosure auction, or Trustee Sale, can be very rewarding but not easy. The difference between gain and pain comes down to knowing how it works and being prepared. As veterans of many auctions, we put together this guide to give you an overview of the process.
All auction properties are “As Is” and all sales are final. All sales are cash only. At the auction there are three scenarios that could happen with the property you are interested in. 1) The sale can be cancelled or postponed to another date; 2) The opening bid may not be low enough to spark interest and the bank retains the property; 3) The property is sold to highest bidder. Cashier’s checks for the full amount are required at that time. The competition is not great, so at this point your chances are good. Our goal is to win far below current market value.
- We find the best property(s) fitting your criteria
- We research any liens and do preliminary due diligence
- We will verify the current scheduled date(s) and location(s) of the auction held in either Riverside or Corona
- We attend and do the actual bidding for you
- Upon successful bid, we complete the post auction title work such as recordation of the deed
Prior to attending any auction, there are a few things that we’ll need to take care of. There are several forms, we’ll ask you to sign. They are:
Real Property Investment Agreement — This is an agreement with us for our services and fees. This is executed once and will remain in force until either you or we cancel it.
Property Auction Authorization — You will complete one of these for each property we will be bidding on for you. It authorizes us to a maximum amount at the auction. You may wish to be on the phone with us during the actual bidding should you wish to bid slightly over the maximum amount you authorized. Of course, we must have sufficient funds.
Specific Power of Attorney — Executed one time and in force until cancelled. This allows us to endorse any cashier’s checks you have provided for the purchase to the trustee of the property should you be successful.
Prior to the auction we will:
- Determine legal ownership of the property
- Determine current occupancy of the property
- Attempt to enter and photograph interior and exterior of property
- Ensure that you will be bidding on the 1st trust deed
- Determine any outstanding property taxes, property liens, abatement penalties
- Provide you with a complete property profile for you to review
- Assist you in determining a fair market value and bid
Three days prior to the auction you will:
- Return Property Auction Authorization form
- Provide Cashier’s checks $5,000 over the maximum you are authorizing. We will let you know denominations. Checks are always made out to yourself.
After the auction if you were successful:
- You will receive a refund check for any overpayment of the final sale amount within 14 days
- We will receive the Deed and submit it to the County Recorder’s office for recording
- Assist you in securing Title Insurance and Home Warranty for the property
- You will need homeowner’s insurance for the property effective on the date of the sale
- Arrange to re-key and secure the property
The good news is that there are no escrow fees associated with this type of transaction. You own the property as soon as the trustee has your cashier’s checks in hand.
Contact us and let us know what you are looking for. We’ll find it for you and help you get it … way below market value.
