buying a house at a forclosure auction - Chicagoland Sportbikes
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post #1 of 9 (permalink) Old 10-28-2008, 12:31 PM Thread Starter
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buying a house at a forclosure auction

Any one know about this practice. theres a house Ive looked at thats in forclosure and its going to auction coming in november.

any insight you guys could provide would help alot




the house hasnt been lived in for about 2 years, the pipes have been winterized with antifreeze so i dont think i need to worry about frozen burst pipes

-Jason
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post #2 of 9 (permalink) Old 10-28-2008, 01:11 PM
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i too would like info on this. i have no money for a down payment, but good enough credit.

i want to drink, but only to kill a certain few brain cells and i don't care how many i have to take out to get to them.
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post #3 of 9 (permalink) Old 10-28-2008, 01:12 PM
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I've never bought a property from auction. That said, here's a few things I do know. Besides all the potential maintenance issues, the transaction itself can more difficult than usual.

If you're not liquid enough to pay for the property at the time of auction, arranging financing can be tricky. Often there isn't enough time to do so. Even when there is, getting the loan closed can be problematic. Many lenders want an appraisal that includes interior inspection/photos. Getting access to the property can be a problem. HUD, for example, has been known to not let anyone in a foreclosed property until after the sale. Was the previous loan an FHA loan?

There's also handling the auction wisely. Do you homework! Have a very strong feel for full market value of that property. If it needs work, also know what it's worth in it's current condition. Go into the auction with a "max bid", knowing you will not exceed that price. Sometimes bidding can get emotional. If bidding gets out of hand, walk away.

If you don't have access to someone that has done this before a number of times I would suggest speaking with a real estate attorney early in the process.
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post #4 of 9 (permalink) Old 10-28-2008, 01:14 PM
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My father in law been doing foreclosures for over 20yrs, Right new he does a bunch in Aurora/Romeoville,Plainfield. Those are the easiest to turn or rent since the houses are newer its mostly cosmetic you have to repair. I would worry about older houses where you don't know whats hiding behind the walls. How old is the house your looking at?
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post #5 of 9 (permalink) Old 10-28-2008, 01:40 PM
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post #6 of 9 (permalink) Old 10-28-2008, 01:44 PM Thread Starter
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I dont know about the previous loan but there are open house days which I will attend and extensively photograph.

Im banking on the house needing work and thusly it will be no show peice at least initially.

as for emotion going into my bidding...i wont let that happen, its stung me on ebay int he past and I no longer let that get in the way.

as for my financial standing, Ive spent the last 15 months banking as much as humanly possible from my paychecks so ive got a decent stack in savings. Id definately need a loan for this though. It would also by my first house. along that line im not looking for a flip or near future resale.


I also do not know how old the house is but its in arlington heights and does not look bad externally, though that means jack is the walls are falling off internally. Ill try and get some external shots tonight but i promise nothing as ive got some other stuff going on too

-Jason
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post #7 of 9 (permalink) Old 10-28-2008, 02:06 PM
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It's nearly impossible for an inexperienced individual to be able to attend one of these auctions and be successful.

There are people / companies that make these auctions their business and have the capital and research capabilities to have a quick and successful transaction.

They do title searches to find out if there are any leans on the property in addition to the mortgage owed. They know if there are any outstanding property taxes and any other financial data needed to make an educated decision.

The house will almost always go for at least $1.00 over the existing mortgage, so nobody is out there stealing these properties. Great deal? Sometimes. That's how these investors work - volume. They may not make money on every situation but they will on most.

In some cases I've known these people / companies to work together and avoid going to the same auctions. They will work together over the phone to determine who will send a buyer where. If they see an outsider there, they will out bid them just to keep them out of the game.

There are plenty of foreclosures out there right now, you don't need to be going to one of these auctions. If you'd like more info on buying a short sale or a foreclosed property send me a PM with your number and I'll call you.
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post #8 of 9 (permalink) Old 10-28-2008, 02:15 PM
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I've tried bidding on several. The bidding always got past the "steal" zone and I've let them go.

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post #9 of 9 (permalink) Old 10-28-2008, 02:21 PM

 
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Quote:
Originally Posted by bio-nuke View Post
i too would like info on this. i have no money for a down payment, but good enough credit.
Can't buy a foreclosure at auction with no money down. Most require 10% down at completion of bidding.

You also will have a difficult time buying ANY home with no money down these days...no matter how good your credit is.

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