Apr 24 2008
Clark County Foreclosure Auctions
A few weeks ago I spent a few hours at a Trustee’s Sale, near the Clark County Courthouse gazebo. I was curious how the final step of the foreclosure process works.
A few weeks earlier, I read the Notice of Trustee’s Sale in the local paper, and wrote down the addresses. I then went and researched all of the homes listed, noting loan balances, late payments and fees, as well as what I thought market value was on the homes.
How the Auction works.
The trustee goes through the list of foreclosed properties, what the opening bid is from the lender, and asks whether there will be any bidders on each property. If anyone is interested in bidding, they must register with the Trustee, and show Cashiers Checks greater than the opening bid. If they are the winning bidder, they will have to sign over the checks to the trustee.
In most cases there were no bidders, as the opening bid was greater than the value of the property and the bank or lender takes possession of the property and it turns into REO, or Real Estate Owned by the bank.
About 10% of the properties at the auction actually had some equity, and there were multiple bidders for them. Although there are some good deals out there, you must be very thorough in your research. Properties sold through auction might have underlying liens on them, so buyer beware. It is a good idea, before making any bid, to thoroughly research the property and even pay for a title search, to identify possible problems.
My conclusion:
Foreclosures are way overhyped. I think that better deals can be had by buying properties that are in short sale. At least that way you have the protections afforded by a real estate contract.
Leave a Reply
You must be logged in to post a comment.