[truong81]

Hello...

I found a house that I am interested in that will be auctioned off next Monday. Can I call the trustee and make them an offer?
What steps do I need to do?

Also, I read that if the house goes into auction there will be little to no time for me to do a titel search. Besides hiring a title company to do the search, will I be able to go down to the court house to see if there has been any other liens against the house?

Thanks for any advice.

[Fr_Chuck]

You can always go to the court house and do a title search.

If the house is already advertised, most likely unless redeemed by the owner, it will go to auction, normally they will want a certain amount paid at the time of the bidding ( around 10 to 20 percent of the price is normal) Or sometimes a set amount like 10 or 20 thousand to be paid at the time the bid is accepted.

Then you normally have 10 to 30 days to pay the balance. So I will assume you have the funds to pay the sale amount and will not need to get a loan, ( or you have a loan already pre approved)

[truong81]

hmm... I don't know how to ask this question.

so this house is about to go into auction next Monday. I know the outstanding loan amount which is a lot less than what the market value for the house is. Will it be logical to submit an offer for the loan amount that they had defaulted on?

[ScottGem]

Plus 10%.

[truong81]

Since the auction is not till next Monday. Can I make an offer with the trustee?

[rockinmommy]

No. The trustees typically won't even give you the time of day. You will need to go to the auction and bid. It's a live auction. Sometimes the bank will even buy the property back themselves for much more than the starting price. I don't know why they don't just set the starting price higher - just to get people bidding in the hopes that they'll drive the price higher, I guess.

[truong81]

What if I'm able to contact the owners? What steps would I need to do? Obtain a release form so I can talk to their lender?

[ScottGem]

You can try the owner, but it depends on what point in the foreclosue process the property is. If the foreclosue has been completed, then the previous owner is out of the picture and you have to wait for the auction.

[truong81]

Well the house is going to be auctioned off next Monday. I'm not sure what I can do at this point.

[ScottGem]

Wait for the auction and get your financing in place before that.

[truong81]

I rather not wait for it to go into auction. I was wondering and hoping if I can make an offer to the owner or maybe the owners can release their lenders information to me? Is this un heard of?

[rockinmommy]

It's not unheard of... but NOT an easy process. Like Scottgem said, it depends on what stage the foreclosure is at. Sometimes the owner can redeem things right up to the time of the auction - sometimes not. The owners are not always receptive to talking to you because they've probably been getting hounded by tons of investors who want to "help" them, etc. It's worth a try. If they'll talk to you and give you permission to speak directly with their lender you can proceed. You'd basically be asking the bank to do a short sale and that's usually a process that takes more than a week to work through. And don't expect that the low starting bid for the foreclosure auction is any indication of what they're willing to let the property go for. 90+% of the time that's not a real number.

Have you been able to search any records to see how long the owners have had the house, what they purchased it for, what they originally borrowed, etc?

[truong81]

Hi rockinmommy- first off you rock! You've been very helpful with your past few replies to my post and I want to say thank you.

I have been able to contact the owners. They are willing to meet up with me today to take a look at the property.

Yes, I have done my research on the owners. In 2005 they bought two properites. The one I am interested in right now for 600K and another one for 560K. The loan due on this one is only $420, I do not what role that figure will play. I'm guessing that will be the min bid if the house or when the house goes into auction.

I have someone who works at the government center who will be able to do a title search on the house.

I guess my question will be, when I get with the owners to see if they will let me negative. Something with their lender?

[truong81]

Also, if the owners are willing to let me speak to their lender... do I need some sort of letter for the owners? If so, where can I find that?

[ScottGem]

Again, if the house has been foreclosed on then the lender is the owner.

[truong81]

Again, if the house has been foreclosed on then the lender is the owner.

Yes but I do not know if it has been foreclosed.

[ScottGem]

If the auction is in a week, its been foreclosed.

[truong81]

If the auction is in a week, its been foreclosed.

Acutally the trustee called and confirmed that the house has not been foreclosed but is in the process of being foreclosed.

[ScottGem]

Well in that case, contact the owner.

[Dr D]

Your use of the term Trustee would indicate that the note is secured by a Deed of Trust. That instrument gives the Trustee the power to sell the property. Usually a bid is automatically entered on behalf of the beneficiary totaling the principal balance of the loan, accrued interest, attorney fees etc. The loan can be reinstated prior to the Trustee Sale if all the back payments and fee are paid. Since the property appears to have a fair amount of equity, your best bet is to strike a deal with the owner on a purchase. If you come to an agreement, then you will have to be prepared to pay the funds needed to stop the sale, and have your financing lined up to consummate the purchase. It would be best to have a rush title search done before you pony up your cash, just in case the seller has a big tax lien, or judgement.