Buying at the courthouse auction

[pegbert]

How does buying at the courthouse auction work? For example a posted bid for a property with a market value of $500,000 may be $600,000 but the property sells to a 3rd party for $300,000. Why would the bank let the property go for less than what is owed on the property?

[temeculaguy]

Search old posts, there have been lots of discussions in the past regarding courthouse steps auctions. Haven’t seen the scenario you describe, post an address and we can collectively figure out the reason or the back story. One possible explanation is that a property with a 500k market value might have 150k in 2nd or 3rd mortgages and be behind a few years in taxes and hoa fees. When buying at the courthouse, you have settle with all the liens, so 300k to the bank and 200k to everyone else doesn’t end up as good of a deal. If the bank takes it back, they settle with the other liens (taxes for retail but often less to the others) and then sell on the open market. Reo buyers usually buy clean title, not so at the steps. Other screaming deals at the steps are cracked slabs or structural issues. Anyway you slice it, you gotta come with cash, no loans for the steps, so there are some deals to be had but there are many bidders, so if the others pass on a half off market property, there is probably a reason.

[temeculaguy]

Search old posts, there have been lots of discussions in the past regarding courthouse steps auctions. Haven’t seen the scenario you describe, post an address and we can collectively figure out the reason or the back story. One possible explanation is that a property with a 500k market value might have 150k in 2nd or 3rd mortgages and be behind a few years in taxes and hoa fees. When buying at the courthouse, you have settle with all the liens, so 300k to the bank and 200k to everyone else doesn’t end up as good of a deal. If the bank takes it back, they settle with the other liens (taxes for retail but often less to the others) and then sell on the open market. Reo buyers usually buy clean title, not so at the steps. Other screaming deals at the steps are cracked slabs or structural issues. Anyway you slice it, you gotta come with cash, no loans for the steps, so there are some deals to be had but there are many bidders, so if the others pass on a half off market property, there is probably a reason.

[temeculaguy]

Search old posts, there have been lots of discussions in the past regarding courthouse steps auctions. Haven’t seen the scenario you describe, post an address and we can collectively figure out the reason or the back story. One possible explanation is that a property with a 500k market value might have 150k in 2nd or 3rd mortgages and be behind a few years in taxes and hoa fees. When buying at the courthouse, you have settle with all the liens, so 300k to the bank and 200k to everyone else doesn’t end up as good of a deal. If the bank takes it back, they settle with the other liens (taxes for retail but often less to the others) and then sell on the open market. Reo buyers usually buy clean title, not so at the steps. Other screaming deals at the steps are cracked slabs or structural issues. Anyway you slice it, you gotta come with cash, no loans for the steps, so there are some deals to be had but there are many bidders, so if the others pass on a half off market property, there is probably a reason.

[temeculaguy]

Search old posts, there have been lots of discussions in the past regarding courthouse steps auctions. Haven’t seen the scenario you describe, post an address and we can collectively figure out the reason or the back story. One possible explanation is that a property with a 500k market value might have 150k in 2nd or 3rd mortgages and be behind a few years in taxes and hoa fees. When buying at the courthouse, you have settle with all the liens, so 300k to the bank and 200k to everyone else doesn’t end up as good of a deal. If the bank takes it back, they settle with the other liens (taxes for retail but often less to the others) and then sell on the open market. Reo buyers usually buy clean title, not so at the steps. Other screaming deals at the steps are cracked slabs or structural issues. Anyway you slice it, you gotta come with cash, no loans for the steps, so there are some deals to be had but there are many bidders, so if the others pass on a half off market property, there is probably a reason.

[temeculaguy]

Search old posts, there have been lots of discussions in the past regarding courthouse steps auctions. Haven’t seen the scenario you describe, post an address and we can collectively figure out the reason or the back story. One possible explanation is that a property with a 500k market value might have 150k in 2nd or 3rd mortgages and be behind a few years in taxes and hoa fees. When buying at the courthouse, you have settle with all the liens, so 300k to the bank and 200k to everyone else doesn’t end up as good of a deal. If the bank takes it back, they settle with the other liens (taxes for retail but often less to the others) and then sell on the open market. Reo buyers usually buy clean title, not so at the steps. Other screaming deals at the steps are cracked slabs or structural issues. Anyway you slice it, you gotta come with cash, no loans for the steps, so there are some deals to be had but there are many bidders, so if the others pass on a half off market property, there is probably a reason.

[an]

To ad onto tg’s statement of “…so if the others pass on a half off market property, there is probably a reason.”, most investors out there who are bidding at the steps would be happy w/ 20% ROI for clean flippable houses. Based on SD R’s comments, it seems like many are now shooting for as low as 10% ROI. So, those that are selling 50% off fair market price must have some kind of issues that caused other investors to stay clear from it.

[an]

To ad onto tg’s statement of “…so if the others pass on a half off market property, there is probably a reason.”, most investors out there who are bidding at the steps would be happy w/ 20% ROI for clean flippable houses. Based on SD R’s comments, it seems like many are now shooting for as low as 10% ROI. So, those that are selling 50% off fair market price must have some kind of issues that caused other investors to stay clear from it.

[an]

To ad onto tg’s statement of “…so if the others pass on a half off market property, there is probably a reason.”, most investors out there who are bidding at the steps would be happy w/ 20% ROI for clean flippable houses. Based on SD R’s comments, it seems like many are now shooting for as low as 10% ROI. So, those that are selling 50% off fair market price must have some kind of issues that caused other investors to stay clear from it.

[an]

To ad onto tg’s statement of “…so if the others pass on a half off market property, there is probably a reason.”, most investors out there who are bidding at the steps would be happy w/ 20% ROI for clean flippable houses. Based on SD R’s comments, it seems like many are now shooting for as low as 10% ROI. So, those that are selling 50% off fair market price must have some kind of issues that caused other investors to stay clear from it.

[an]

To ad onto tg’s statement of “…so if the others pass on a half off market property, there is probably a reason.”, most investors out there who are bidding at the steps would be happy w/ 20% ROI for clean flippable houses. Based on SD R’s comments, it seems like many are now shooting for as low as 10% ROI. So, those that are selling 50% off fair market price must have some kind of issues that caused other investors to stay clear from it.

[SD Realtor]

AN the one I was talking about that went on Penrod last week for 359k is gonna open at…. 420k on the MLS soon. Are you kidding me? No way comps support that but the agent thinks he can get it. So at 420k, if he offers 2.5% plus another 1% for closing costs he is gonna net maybe 45k? That is if he gets full price. I will not believe it if he does but ya never know. Anyways the home is vacant and that is actually a nice premium when purchasing at trustee sales cuz getting the owner or worse a tenant out is time consuming and time is money. Also the home is in decent shape, not bad at all, the yard is dead but you never know. I personally had a hard time seeing the home even sell for 400k. It is also only 2 homes off of Flanders… anyways this will really be a stretch… no doubt the guy will make money off of it, he is a regular at the trustee sales… say he only makes 20k… so that would be about 6-7% on his money right? However if he closes and gets the cash less then 60 days after he bought it that is not bad for a 60 day investment. I can see where he is coming from I guess. Although even for him to make 20k it is gonna be tight.

[SD Realtor]

AN the one I was talking about that went on Penrod last week for 359k is gonna open at…. 420k on the MLS soon. Are you kidding me? No way comps support that but the agent thinks he can get it. So at 420k, if he offers 2.5% plus another 1% for closing costs he is gonna net maybe 45k? That is if he gets full price. I will not believe it if he does but ya never know. Anyways the home is vacant and that is actually a nice premium when purchasing at trustee sales cuz getting the owner or worse a tenant out is time consuming and time is money. Also the home is in decent shape, not bad at all, the yard is dead but you never know. I personally had a hard time seeing the home even sell for 400k. It is also only 2 homes off of Flanders… anyways this will really be a stretch… no doubt the guy will make money off of it, he is a regular at the trustee sales… say he only makes 20k… so that would be about 6-7% on his money right? However if he closes and gets the cash less then 60 days after he bought it that is not bad for a 60 day investment. I can see where he is coming from I guess. Although even for him to make 20k it is gonna be tight.

[SD Realtor]

AN the one I was talking about that went on Penrod last week for 359k is gonna open at…. 420k on the MLS soon. Are you kidding me? No way comps support that but the agent thinks he can get it. So at 420k, if he offers 2.5% plus another 1% for closing costs he is gonna net maybe 45k? That is if he gets full price. I will not believe it if he does but ya never know. Anyways the home is vacant and that is actually a nice premium when purchasing at trustee sales cuz getting the owner or worse a tenant out is time consuming and time is money. Also the home is in decent shape, not bad at all, the yard is dead but you never know. I personally had a hard time seeing the home even sell for 400k. It is also only 2 homes off of Flanders… anyways this will really be a stretch… no doubt the guy will make money off of it, he is a regular at the trustee sales… say he only makes 20k… so that would be about 6-7% on his money right? However if he closes and gets the cash less then 60 days after he bought it that is not bad for a 60 day investment. I can see where he is coming from I guess. Although even for him to make 20k it is gonna be tight.

[SD Realtor]

AN the one I was talking about that went on Penrod last week for 359k is gonna open at…. 420k on the MLS soon. Are you kidding me? No way comps support that but the agent thinks he can get it. So at 420k, if he offers 2.5% plus another 1% for closing costs he is gonna net maybe 45k? That is if he gets full price. I will not believe it if he does but ya never know. Anyways the home is vacant and that is actually a nice premium when purchasing at trustee sales cuz getting the owner or worse a tenant out is time consuming and time is money. Also the home is in decent shape, not bad at all, the yard is dead but you never know. I personally had a hard time seeing the home even sell for 400k. It is also only 2 homes off of Flanders… anyways this will really be a stretch… no doubt the guy will make money off of it, he is a regular at the trustee sales… say he only makes 20k… so that would be about 6-7% on his money right? However if he closes and gets the cash less then 60 days after he bought it that is not bad for a 60 day investment. I can see where he is coming from I guess. Although even for him to make 20k it is gonna be tight.

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