Collin County Foreclosure Auction? (for sale, apartment, foreclosures)

[JenH1]

Has anyone been to the monthly foreclosure auction? I'm curious what it is like. All the listings show that the property will be auctioned at "x time or within 3 hours of x time", so I can't tell when it really starts. I'm not looking to buy - just want to go see what it is all about.

[derekv]

I've been to a few of these representing Lenders. The sale will happen whenever the Trustee shows up - they have a four hour window from the time stated in the notice. Typically it will start within an hour of the time listed. They happen literally on the courthouse steps and occur on the second Tuesday of the month. Are you just interested in the process? or the houses for sale?

[JenH1]

I'm just curious about everything - how the process works, who the buyers are, how the sales prices at auction differ from the value of the houses if sold at MLS, do all of the houses on the foreclosure list actually get sold, etc.

So the sale happens outside? Do people just stand around the whole time or is there seating/bring seats? It seems like it might take awhile based on the number of houses that will be listed.

[iberanon]

Cash only. They go back to the lender who then list it on MLS. If it got issues then it goes to online auction next.

[derekv]

Originally Posted by JenH1

I'm just curious about everything - how the process works, who the buyers are, how the sales prices at auction differ from the value of the houses if sold at MLS, do all of the houses on the foreclosure list actually get sold, etc.

So the sale happens outside? Do people just stand around the whole time or is there seating/bring seats? It seems like it might take awhile based on the number of houses that will be listed.

I can probably answer a few: The Trustee for the lender runs the auction for their properties - so they are not going one at a time, but there could be 40 or so trustees each auctioning their portfolio. It happens very quickly, maybe a 30 seconds or a minute for a property if they have a few. Many of the properties on the foreclosure listing never make it to auction, the owner and lender cut a deal. You need to have cash or bank cashiers check for the purchase, as a result, most of the buyers are investors or flippers. The properties for sale likely have issues, otherwise the current owner would sell and not be in foreclosure. If you plan to bid, you need to carefully review the title and tax issues of the property and do as much diligence as you can on the home itself - there is no title insurance, warranty or option period - you get the home as is. The seasoned investors do drive by's and often will pay the current resident/tenant $50 to do a walk through of the property.

Go and report back! I'd like to see how the price discount to the current market is. The deals I was involved with weren't residential, so I wasn't really paying attention to the prices.

[Wittgenstein's Ghost]

I used to be an investor in DFW, and I frequented the Tarrant County auctions. There are two types of foreclosure auctions: sheriff sales and mortgage foreclosures. Technically, there could be other private party foreclosures, but mortgages make up the bulk of them. The sheriff sales are for property tax purposes, and the private party foreclosures are, like I said, typically for mortgages.

The sheriff sales start promptly at 10:30 AM on the first or first Tuesday of every month. They run through the list, which can be obtained online ahead of time, and it typically takes a few hours. The private party foreclosures start when the trustee shows up.

In my opinion, there are very few, if any, deals to be had. When you consider all of the factors -- there is no title policy, there are major unknowns about the property, and in the case of sheriff sales, there is a redemption period -- a reasonable person should discount property values significantly from market price. I haven't been to one in about a year, but the prices I saw last year were shocking. I can't imagine a person paying $110,000 for a property that would hit the MLS at $135,000. That's crazy. First, you are going to spend about 8% ($10,800 in total costs to sell that $135,000 property. You also have to assume there is going to be some renovation needed. Finally, depending on whether the property was a primary residence or not, there is a redemption period of either six months or two years, and that means carrying expense. When you put it all together, I imagine there are a lot of folks losing money on foreclosure auction buys.

That's not to say there are never any good deals or that a person looking to buy a house as his or her residence couldn't possibly find something. It seems unlikely, though. Of course, you also must have the full purchase price in cash, ready to go.

Regarding contacting the residents of the property prior to auction: This is extremely hard to do. I tried all sorts of stuff, including sitting a six pack of beer and a note on a guy's doorstep, to get a simple conversation with residents. It almost never worked. They are bombarded by flippers who are going to the auction, and they simply won't answer their phone or open their door. Personally, I wasn't willing to go too far to invade their privacy, so I would normally only knock a single time and leave a single voicemail. I'm sure there are some others out there who are a bit more unscrupulous.

[JenH1]

Originally Posted by Wittgenstein's Ghost

There are two types of foreclosure auctions: sheriff sales and mortgage foreclosures. Technically, there could be other private party foreclosures, but mortgages make up the bulk of them. The sheriff sales are for property tax purposes, and the private party foreclosures are, like I said, typically for mortgages.

Back with my review.....

Started accidentally at the sheriff sale, the two buildings are close by each other - I'll go back to check that out another day. I got to the foreclosure auction and there were tons of people (maybe 50?) standing around. It seemed chaotic. There was a tent for auctions.com properties, but the other properties were just getting auctioned off by auctioneers next to it. At least once while I was there, there were two different auction going at the same time. It was very hard to figure out who and where to go if you were looking for a specific property (other than the auctions.com listings since they had a booth.

It was hard to tell who was actually there to buy, because other than a few serious groups of bidders, most people seemed to be newbies. Most everyone I talked to said it was their first time, with a few people telling me that they are taking a class (?!) for this. Some newbies had paid money for details of all the listings, even though they weren't buying anything today. I had a realtor tell me that he could sell me some investment property for a decent deal.

There was one apartment property that had a fun bidding to watch - two main bidders and everytime it looked like the bidding was going to end, a 3rd bidder upped the price. Most of the other bidding was pretty dull, including the main auction I wanted to see which didn't get any bids.

LMK if you have any questions!

[JerseyBornandRaised]

Well, here I am in NJ trying to learn about foreclosures. Yes I understand that states will have differences. What is puzzling to me is the "recently sold" section of Zillow in the area I am looking to buy a foreclosure in.

https://www.zillow.com/homes/recentl...45_rect/12_zm/

Someone please tell me that all those properties are being sold for such minimal amounts? I mean really nice 3 bedroom 3.5 bathrooms for under and around 10k? Is this really what people are getting them for at auction? I am blown away. Someone burst my bubble before I empty my 401k?

[TeamLynn]

@Jersy....not sure what those prices represent...but I think that's one of those Geico...My boyfriend is French commercials. Don't believe everything you see on the internet....believe less of what you see on Zillow.