Foreclosure auction?
Question:
The amount due under the Judgment is $5,120.16, with interest, costs, etc. Sale subject to terms of sale and provisions of the Judgment herein, including being subject to a mortgage held by Charles Clouds upon which there is due the principal sum of $12,300.00 with interest.
What measurements should I take, before going to this auction? What does it mean?
Answer:
It means that you'll probably need $20,000 in cash or preferably a cashiers check in order to begin bidding. It's possible that you may need much more than that, but that's a bare minimum. If you can't come up with cash, read the terms of the auction, because you may not qualify to bid.
If you do qualify, and have the cash available, you may have great luck and find an opportunity to buy. But be careful, because you are buying the property in "as-is" condition, and moreover, there may be reasons why the previous owner was williing to let the property go. There may be terrible neighbors, or drug dealers in the neighborhood, or there may be zoning problems or other regulatory issues, or there could even be a sinkhole under the property. Be sure to consider all the possibilities. But sometimes you can get a great deal this way. Good luck to you.
Buying foreclosure properties is tricky business. It's also something that a lot of people know about and getting a good deal and be hard (especially in hot markets). What makes it more difficult is that some of these auctions are for properties sight unseen. This is where the playing field is extremely skewed because local developers and other people "in the know" generally get inside info on which properties are being sold ahead of time and can evaluate the property before you even hear about the auction.
Oh, and that description means you inherit the debt that the previous owner had on the property.
First of all you are buying the property in "as is" condition with no warranties.
You might want to contact the master of sale appointed by the court and see if you can conduct a walk through or best yet get the property inspected so you know what you are getting into.
Second if no one else bids on the property above what you described you will be buying the property for a total of $17,420.16 plus accrued interest on the $5,120.16 plus cost of auction sale, attorney fees and other sales cost plus accrued interest on the $12,300.00 note and mortgage which will be added to that note as total owed.
The terms of the note and mortgage that you will inherit could be something that you do not want and could have been (maybe) the cause why the former owner defaulted amongst the many reasons why they did default. So go to the court house and get a copy of the note and mortgage and see what it says, it might be that you want the property but you wont want it after you see those terms.
Finally if the note and mortgage that you would inherit is acceptable to you no problem if it is not you will need to make sure that if the note and mortgage you are inheriting allows it, without penalty, you either have the money or you have been approved for a loan to pay off the note and mortgage.
Caution is a must here. There must be a reason why this property was let go for such little money. If there are no reasons be ready for substantial competition at the auction.
Buena Suerte
This is not meant to be flip...
If you are asking such questions you should go to the auction to learn but not as a serious bidder.
The lender that is foreclosing is not the lender in 1st position. There is a senior lien. Maybe more than one. You can bid at auction and pay your cash but you would also be effectively buying the obligation to pay on other liens. If you fail to deal with them (monthly payment or otherwise) then they can foreclose on you.
So, the condition of the title is critical. You also have to know what the property is worth given the debt and other costs you would have to pay (bid at auction, other liens, repairs or other items before you could easily resell or rent).
People do make money when they buy at auction. They also lose money when they end up with something other than they expected.
More Related Questions & Answers...