<p>Any experienced bidders here? Estranged relative #1 is losing her house to foreclosure, and relative #2 is seeking my help in bidding on the property. The upset price is 2.5 times the assessed value of the property. The auction site shows that the Plaintiffs max bid (which I understand to be the max that they are authorized to bid) is the upset price.
Am I right to assume that there’s very little chance – if any – that the bank is going to let this property go at or near the assessed value?
As I look through the auction results, almost all auctioned properties have been purchased by the Plaintiff. The only exceptions have occurred when the max bid has not been revealed.
Am I interpreting these tea leaves accurately?
I’m wondering if relative # 2’s best bet would be to wait until the house is put up for sale by the bank, and submit an offer at that point. Thoughts? I have one week untill the auction.</p>
<p>Sorry, I only have experience with auctions for FannieMae and HUD auctions. Those homes, in my area, can be had for 20-30% of the mortgage amount when the bank took it back. It was a very easy process and quick close for us. </p>
<p>Good luck!</p>
<p>I am an experienced foreclosure/REO auction buyer and it is currently my full time job…:)</p>
<p>So the Plantiff is the bank right? What do you mean the 2.5 upset price? Does it mean there is a auction starting price and the bid is 2.5 time that?</p>
<p>Whatever it is, you just have to know your real estate value in the area and buy it below the value. If it is higher, let the bank buy it and then negotiate with the bank… If the bank does not agree, your relative have to move out and let the bank sell the property in REO sale, at that time, you can make an offer as you see fit.</p>
<p>Thank goodness for people with some experience!
By 2.5 I meant that the judgement amount is more than twice the the assessed value of the property, two and one-half times more.
Plaintiff is the bank. It appears that in most instances, in the history of this auction, the bank starts with a $100 bid. However, the Plaintiff is buying almost all of the properties listed.</p>
<p>I have been encouraging relative #2 to just let the bank buy it, then take her time evaluating the (substantial) repairs that would likely be needed before submitting an offer.</p>
<p>assessed value in Cal. means nothing due to Prop 13. The property is assessed at the value when it was last sold and increase 2% per year. You can have a property assessed at 100k while the market value is 1 million.</p>
<p>In NJ where I came from, the assessed value is close to the market value, and 2.5 time of it is sky high. so, why bother to buy it at an auction?</p>
<p>All in all, just do your duediligence, if the asking is too much, don’t buy it.</p>
<p>I was initially confused, because the assessed value around here is approximately equal to the market value. I take it that the house in question is being offered at auction at a price well below market value, although substantially higher than the assessed value? Is the reason for buying this particular house to allow the first relative to stay in his/her home, that is, be foreclosed, have the house bought at auction by a third party, then buy it back?</p>
<p>The assessed value is probably pretty close to the market value, although this particular house may need a fair amount of work to actually be worth that much. Relative #1 refinanced multiple times during the real estate bubble. Even had one of those mortgages where they paid minimal interest for years and then several years later there was a major bump in rates. They expected the real estate to continue to rise, so never really considered that they’d have to pay the piper. So, enter a medical problem, death of the spouse, the interest continued to pile up, so now she owes 2 1/2 times the value of the house. The house abuts the house of Relative # 2, impacting to some extent the value of # 2’s property. It’s a mess. Relative # 1 has already vacated, burning bridges as she went. I’m helping because Relative 2 is elderly and not internet savvy.</p>
<p>“Am I interpreting these tea leaves accurately?”</p>
<p>If you were in my area you’d be spot on. I’ve been to two foreclosure auctions. In both cases there was one bid. It was by the bank, and it was exactly what the mortgagee owed. In both cases the bank bid was considerably above market price. I asked a couple people why this was, and was told that there was some sound reason for it. Legal, balance sheet, IDK. It is common for the bank to accept a discounted price for the foreclosed property AFTER it has taken the property back. So I agree with artloverplus … if the bank has the winning bid, take your time assessing the property and (if inclined) make an offer directly to the bank.</p>
<p>Banks often bid an amount equaling the loan balance in order to recover the property and then resell it at the highest price possible in order to minimize the bank’s loss.</p>
<p>In most auctions, you have to pay cash for the full price and settle in a several week period of time. It is not often the case that you will be able to get a mortgage to purchase the property. You should be prepared to pay cash or have other liquid sources of money. </p>
<p>If the bank bids the full loan amount, you can approach the bank after the sale and offer to purchase the property at a lower price and offer to let the bank finance the purchase. Letting the bank recover some of their money from a mortgage may create an incentive for them to sell you the property at below the market price.</p>
<p>not any more. foreclosure auctions have been gradually moved from the steps to the auditoriums. The banks also realize they have to buy it back at full balance of the loan on the steps, so they resort those auction houses to conduct auctions for them at below market price so they do not have to worry about the eviction process. When the banks have to process thousands of evictions, it became a problem and time consuming process, so, they don’t want to buy it back and sell them through auction house at fire sale prices and let the new buyer do the evictions.</p>
<p>The Foreclosure sale by auction houses for the bank has the same rules as if it is sold on the steps, you have to have all cash on hand to bid and pay for the trustee deed right there and then. You have no rights to preview the property(drive by only) and the trustee deed they sold may be a second mortgage or even it is the first, there might be second or third behind it. Also, trustee sale can be canceled or postponed without notice, some times half hour before auction starts.</p>