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Well I say this because I'm in the exact scenario. I'm personally purchasing my second REO with financing and have a first time buyer client that wants to go to auction with conventional financing in hand. I've explained the risks at great length with him and if he decides not to offer before the auction then we'll go bid.
I've been to an auction before. It wasn't really what I thought it would be. About 10 guys showed up that all looked like investors or contractors and the bidding was over after 5 minutes. Kind of anti-climatic.
Well I say this because I'm in the exact scenario. I'm personally purchasing my second REO with financing and have a first time buyer client that wants to go to auction with conventional financing in hand. I've explained the risks at great length with him and if he decides not to offer before the auction then we'll go bid.
I've been to an auction before. It wasn't really what I thought it would be. About 10 guys showed up that all looked like investors or contractors and the bidding was over after 5 minutes. Kind of anti-climatic.
How are you managing to purchase at auction with conventional financing? In particular, how do you deal with the two big issues; 1.) Purchaser will have to complete the purchase within 30 days. Tough for anyone to guarantee a 30 day closing in the current environment. And 2.) no bank will lend without an appraisal. Purchaser has no right to enter the premises until after purchase is complete. How does an appraisal get done so the bank can lend the money?
How are you managing to purchase at auction with conventional financing? In particular, how do you deal with the two big issues; 1.) Purchaser will have to complete the purchase within 30 days. Tough for anyone to guarantee a 30 day closing in the current environment. And 2.) no bank will lend without an appraisal. Purchaser has no right to enter the premises until after purchase is complete. How does an appraisal get done so the bank can lend the money?
My guess is that they're watching a specific house that's currently a short sale and then waiting for the auction date to try and get a better deal on the property? So it's possible they could have seen the house and noted its condition and know what price they want to pay for it, and are willing to risk it by going to auction.
Still not something I would recommend for a first time homebuyer!
This particular home is available to show before the auction. I've been in touch with the auction company and their recommendation is to do the inspections before an offer is made. In this particular home it is listed almost under 100k from the comps in the last 6 months. Closing in 30 days isn't that far fetched however in their disclosures they state 14-21 for cash, 45 for conventional and 60 for FHA.
This particular home is available to show before the auction. I've been in touch with the auction company and their recommendation is to do the inspections before an offer is made. In this particular home it is listed almost under 100k from the comps in the last 6 months. Closing in 30 days isn't that far fetched however in their disclosures they state 14-21 for cash, 45 for conventional and 60 for FHA.
Auction company? So this isn't a foreclosure auction? That's the impression I had, because of the thread title.
Sorry I think I confused myself here. It is foreclosed and was listed by a brokerage. It is now up for auction through a separate company that allows pre auction offers.
Sorry I think I confused myself here. It is foreclosed and was listed by a brokerage. It is now up for auction through a separate company that allows pre auction offers.
Thanks, I was confused about your comments too. I've never heard of a bank foreclosure auction (trustee sale here) where they don't require all cash within at most a few days. You could try to get a hard money loan to front the cash. As you indicated, private company auctions that may include bank-owned properties are much more flexible.
Thanks, I was confused about your comments too. I've never heard of a bank foreclosure auction (trustee sale here) where they don't require all cash within at most a few days. You could try to get a hard money loan to front the cash. As you indicated, private company auctions that may include bank-owned properties are much more flexible.
In NJ, the winning bidder at the Sheriff's foreclosure auction is required to pay 20% immediately, and the remainder within 30 days, (though interest starts accruing on the 11th day.)
In NJ, the winning bidder at the Sheriff's foreclosure auction is required to pay 20% immediately, and the remainder within 30 days, (though interest starts accruing on the 11th day.)
Here in AZ, it's $10K down and rest by 5pm the next day.
I think the OP is talking about those "auctions' that are a hodge podge of houses investors, multi-home owners, finance companies and regualar sellers use to create a bid type sale. You know the ones where its attended by 100 people, 50 who just attended a seminar by some get rich quick person on buying homes at aution, 30 are people who are jumping on the bandwagon, and 20 are not bidding at all but selling related services to the crowd. These are the ones with a $150,000 home with a listed starting bid of $99,000 and ends up selling for $199,000 through the excitment of the bidding process.
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