Buying Real Estate at Auction - Trustee Sale or Tax Deed

Buying of properties at trustee sale auctions is tricky and risky, and you should hire an experienced Realtor to help you with that. Any experienced realtor can provide you with oodles of information regarding foreclosed homes. Just remember, it is the trustee, not the bank, that sells the home. Since the lender clearly has the most to lose in the transaction, and because they are the beneficiary of any funds received from the sale, they are allow to place the first bid, and are allowed to credit bid (bid without bringing cash to the sale), up to the amount they are owed.

Just know in the state of California, winning bidders pay the entire price in cash or cashier’s checks. You are unable to finance these purchases. Hence, the strong presence of investors at these sales(Foreclosure & Tax Deed) is quite apparent.  With our current economy, I am seeing more and more cash deals transpire by investors than ever before.  Hard money always talks and speaks loudly to any seller, including bank asset managers and the county's assessor's office.

WHY PAY AN EXPERIENCED REALTOR TO WORK WITH YOU?

Not every real estate agent understands the nuances of these particular sales, let alone the common buyer looking for a deal.  There is a great deal of process involved to end up with the deal everyone is looking for nowadays.  Working with an agent who does have the experience will greatly benefit any buyer in the marketplace as it is yet another alternative to the "BOX".  

Bite the bullet and just forecast an additional 3% to your purchase price and BOOM, you are taken care of for a minimal price considering the investment being made.  It is wise to do as much homework as you can on these properties and having an experienced agent by your side to inform and guide you through the process is well worth the nominal fee to ensure as much disclosure as they can.

Properties about to be auctioned at foreclosure auctions can be found through court records, legal notices in newspapers, the real estate classifieds or websites like RealtyTrac. The easiest way is to work with an experienced agent who understands all the nuances to these transactions.

While savvy investors can find deals at foreclosure auctions, not all properties are a steal. The unsophisticated buyer without a real estate professional by his or her side may get carried away during the excitement of an AUCTION. Funny as it sounds, it is true. The euphoria of an auction can sometimes take people over the edge and hence, produce the unwanted 'overbid'.  Having a professional by your side is helpful to keep you on track of the objectives and budget of the transaction.

WHAT AM I GETTING WITHOUT AN INSPECTION?

One of the biggest concerns with purchasing at Tax Deed Auctions is the fact most buyers cannot inspect the property before their bid. The last thing anyone wants to find out later is missing and damaged items.  Trustee Sales are very similar to the County Tax Deed auctions, as buyers are unable to inspect prior to bidding.  Where'd that toilet go?  What happened to all of the electrical wiring?  Forget copper, where's the plumbing?  Again, buyers of auctioned properties incur more risk because of their inability to investigate the home as thoroughly as they could if they bought contingent on appraisal and inspection.

For those who elect to inspect prior to purchase, the Real Estate Owned(REO) properties are better for those buyers.  Bank owned listings are easily generated and can afford a buyer with plenty of information via the Multiple Listing Service(MLS).  The distressed property market is strong here in Los Angeles.  And, you can inspect prior to an offer!  Contact me for a complete list of REO listings in your area/s of choice. 

TITLE CONCERNS

The other consideration to use caution is finding out what title looks like. The last thing someone wants is someone else's baggage.  No one ever wants a clouded title: mechanic's lien, abatements, bank liens, you name it...  The new buyer will be responsible for paying these encumbrances.

Cut through the fog and allow a real estate professional to guide you through the auction process.

WHAT'S THE PROPERTY WORTH?

Get a realistic fair market comparable(Comp) prior to bidding on ANY property at ANY type of auction.

Just be aware the courthouse steps are loaded with cash buyers, seasoned and savvy investors looking to buy. Typically these investors have done their homework and know the fair market values of the properties of interest. You don't want to be the person at the end of the day who goes home and then discovers the value. You want to make sure you have a sound fair market value researched prior to any purchase.  

Do your homework or work with a professional to help guide you. Don't allow yourself to be the buyer with buyer's remorse. Due diligence, folks!

WHERE DO TRUSTEE AUCTIONS TAKE PLACE?

Los Angeles County foreclosure auctions located:

12400 Imperial Highway
Norwalk, California 90650
Auctions take place outside on the steps.


Buyers should be aware and due diligence should take place with every transaction.  For friendly and professional assistance, contact www.modernhomeslosangeles.com.