Foreclosures

[vern_humphrey]

That’s because collectibles like jewels and classic cars will draw collectors to compete. This is very different than auctions that sale real property and other assets of a non-collectible nature.

Can you provide a cite for this? Are you basing your comments on a valid study?

Let me point out that estate sales take place all the time – because people know they’ll get a better price at an auciton for Great-Aunt Tilley’s old dinette set at an auction than they will by consigning it to a used-furniture store.

Many things are traditionaly sold at auction – cattle and other livestock are almost always sold at auction, for example.

Research the procss of sheriff’s auctions on real estate.

The burden of proof is on the one advancing the affirmative.

If banks would allow people to take loans to sheriff’s auctions it would drive up the price of foreclosures, but they won’t do that.

What does that mean?

I can take out a loan at a bank, or get a line of credit and use that to bid at auctions.

As such the only people there are capital investors ready to pay cash for the real estate. The only interest is to acquire property below market value and then resale it on the market and turn significant profits in doing so. For example, the first property I bought in such a fashion I paid $109,000 for it and after some very minor touch up resold it for $214,000.

I’ve made money myself in real estate, but that doesn’t mean I bought below value.

In a forclosure, the property is usually in need of repairs, and very often those repairs will make the property much more attractive.

Thus in a collector’s auction the goal to own the item up for auction for your personal pleasure and bidders will compete for that pleasure.

Many an investor buys art, and many a person in need of a home buys at a foreclosure sale.

At a sherrif’s auction the sole goal is to buy up property as cheaply as possible. As such you don’t enter into “bidding wars” with another buyer, you just pick another property.

And how do you** prevent** bidding wars? If two or more people want the same house, or if there are fewer houses up for sale, the price will go up.

 

[otjm]

Profitting on the misfortune of others seems immoral to me, legal or not.

On who’s misfortune? The homeowners’? The bank’s?

The homeowner is already out of the picture, as they no longer have an interest in the house; you are not profiting from their misfortune as they are at least two transactions removed from you.

The bank made a business loan (that is, they are in the business of loaning money) and they have chosen to dispose of the house through a sale at below market prices (sometimes - one needs to know all the facts before presuming they are making a “deal”). the bank can choose to hold the house, rent it out and sell later; it can choose to put it back on the market at full market price, or it cna choose to sell it quickly, for more, less or for about what the bank has into the house. If the bank chooses to put it out at below market prices, you are not profiting at the bank’s misfortune; you are involved in resolving their debt structure. The bank is more than able to protect its own interest, and is doing so as it sees fit when it sells.

As to the original owners, you are removed from them; it is not as if you are bargaining with them and trying to cheat them out of a profit. Further, under certain transactions, they have a right to redeem their home from you. In such circumstances, you may actually be helping them.

 

[vern_humphrey]

On who’s misfortune? The homeowners’? The bank’s?

The homeowner is already out of the picture, as they no longer have an interest in the house; you are not profiting from their misfortune as they are at least two transactions removed from you.

The bank made a business loan (that is, they are in the business of loaning money) and they have chosen to dispose of the house through a sale at below market prices (sometimes - one needs to know all the facts before presuming they are making a “deal”). the bank can choose to hold the house, rent it out and sell later; it can choose to put it back on the market at full market price, or it cna choose to sell it quickly, for more, less or for about what the bank has into the house. If the bank chooses to put it out at below market prices, you are not profiting at the bank’s misfortune; you are involved in resolving their debt structure. The bank is more than able to protect its own interest, and is doing so as it sees fit when it sells.

As to the original owners, you are removed from them; it is not as if you are bargaining with them and trying to cheat them out of a profit. Further, under certain transactions, they have a right to redeem their home from you. In such circumstances, you may actually be helping them.

I once bought a house by paying the owner’s equity and taking over the GI loan. He was very anxious that I assume the loan.
I kept wondering, “Why? I paid him more than the original cost of the house, and if I default, they have to let him take up the payments again – he’d get a free house out of the deal!”

 

[CCM08]

Can you provide a cite for this? Are you basing your comments on a valid study?

Let me point out that estate sales take place all the time – because people know they’ll get a better price at an auciton for Great-Aunt Tilley’s old dinette set at an auction than they will by consigning it to a used-furniture store.

It’s just a matter of fact. It rather just seems you have no idea what goes on at sheriff’s auctions.

Many things are traditionaly sold at auction – cattle and other livestock are almost always sold at auction, for example.

Wow, I honestly couldn’t care less how live stock is sold.

The burden of proof is on the one advancing the affirmative.

This isn’t a court of law, and it’s not my job to educate you.

What does that mean?

I can take out a loan at a bank, or get a line of credit and use that to bid at auctions.

Again, it’s a matter of this being beyond your experience. Very very few people will qualify for unsecured loans of a sufficent amount to purchase real estate. Lenders will not give loans for property purchased an sheriff’s auctions. They want to make loans on the normal market and they do not want to upset investors by flooding the auctions with buyers.

I’ve made money myself in real estate, but that doesn’t mean I bought below value.

That’s because you don’t have the assets.

In a forclosure, the property is usually in need of repairs, and very often those repairs will make the property much more attractive.

That’s a myth. Foreclosed property is rarely in need of major work. Most people that suffer foreclosure do so because of unexpected changes in their financial situation, job loss, serious illness and the like. The average market value in Washington state of a foreclosed upon home is over $300,000.
It’s also a myth that repairs can substantially increase the value of a peice of real property. Flipping houses, or buying property that is significantly damaged and trying to repair and resale it, is often a finanical distaster. It has absolutely nothing to do with buying foreclosures and reselling them.

Many an investor buys art, and many a person in need of a home buys at a foreclosure sale.

LOL, very few people even know how to find a sheriff’s auction, let alone buy anything at one. Furthermore, if you are in need of a home you don’t go to a sheriff’s foreclosure auction. Most people want to be able to move into a house they’ve bought. Washington state, as does every other state in the union, offers a redemption period to the forclosed upon mortgagee. Meaning that you do not get title for a full 60 days after the close of escrow. If at any time during that 60 days the forclosed upon mortgagee can come up with the amount of money you paid for the property you must accept their money and surrender title to them. The sheriff’s auction process is not for the consumer. This is why banks will not make loans on these properties, there’s every chance that the foreclosed upon mortgagee might secure a means of paying and the bank would have incurred significant costs and earned little return.
It’s another reason banks wish to move properties quickly at auction instead of on the market, they’ve already been holding the property during their part of the redemption period.

And how do you** prevent** bidding wars? If two or more people want the same house, or if there are fewer houses up for sale, the price will go up.

Again, you’re simply applying inaccurate assumptions because you’re dealing with something that exceeds your experience. You obviously know absolutely nothing about the forclosure process or the auction system by which they’re sold. Investors operate on hard limites, that means the maximum amount of money they’re willing to pay for any one property. As such a bidders first bid is usually a final bid. If another buyer is willing to reduce profit margins to get a property other investors are more than willing to take another property. With 1.2 million foreclosures last year there’s no shortage.
It’s simply not my job to educate you on the in’s and out’s of the real estate market.

 

[CCM08]

On who’s misfortune? The homeowners’? The bank’s?

The homeowner is already out of the picture, as they no longer have an interest in the house; you are not profiting from their misfortune as they are at least two transactions removed from you.

The bank made a business loan (that is, they are in the business of loaning money) and they have chosen to dispose of the house through a sale at below market prices (sometimes - one needs to know all the facts before presuming they are making a “deal”). the bank can choose to hold the house, rent it out and sell later; it can choose to put it back on the market at full market price, or it cna choose to sell it quickly, for more, less or for about what the bank has into the house. If the bank chooses to put it out at below market prices, you are not profiting at the bank’s misfortune; you are involved in resolving their debt structure. The bank is more than able to protect its own interest, and is doing so as it sees fit when it sells.

As to the original owners, you are removed from them; it is not as if you are bargaining with them and trying to cheat them out of a profit. Further, under certain transactions, they have a right to redeem their home from you. In such circumstances, you may actually be helping them.

As sheriff’s auctions occur within the redemption period the original mortgagee actually does maintain an interest in the title. In most circumstances the mortgagee will lose significant equity in the real property. If the lender sold at market the mortgage would receive most of that equity. The sheriff’s auction process preseves the tax write off, and ensures that the mortgage will lose all their equity unless they can redeem the property.

 

[vern_humphrey]

It’s just a matter of fact. It rather just seems you have no idea what goes on at sheriff’s auctions.

I’ve asked you twice for a cite.

Wow, I honestly couldn’t care less how live stock is sold.

That’s a rather smarmy comment.

This isn’t a court of law, and it’s not my job to educate you.

And that’s another one.

Again, it’s a matter of this being beyond your experience. Very very few people will qualify for unsecured loans of a sufficent amount to purchase real estate. Lenders will not give loans for property purchased an sheriff’s auctions. They want to make loans on the normal market and they do not want to upset investors by flooding the auctions with buyers.

Who said “unsecured?”

In point of fact, you can buy at auctions with borrowed money.

That’s because you don’t have the assets.

No, it’s because a thing is worth what a willing buyer will offer and a willing seller will accept. When I bought, the seller and I established the market value.

That’s a myth. Foreclosed property is rarely in need of major work.

Let me guess – you don’t have any cites to back that up, either?

Most people that suffer foreclosure do so because of unexpected changes in their financial situation, job loss, serious illness and the like.

Let me guess – you don’t have any cites to back that up, either?

The average market value in Washington state of a foreclosed upon home is over $300,000.

Do you have a cite for that?

It’s also a myth that repairs can substantially increase the value of a peice of real property.

Actually, it isn’t – a house in good repair will sell faster and at a higher price than one in poor repair.

Flipping houses, or buying property that is significantly damaged and trying to repair and resale it, is often a finanical distaster. It has absolutely nothing to do with buying foreclosures and reselling them.

It doesn’t?

LOL, very few people even know how to find a sheriff’s auction, let alone buy anything at one. Furthermore, if you are in need of a home you don’t go to a sheriff’s foreclosure auction. Most people want to be able to move into a house they’ve bought. Washington state, as does every other state in the union, offers a redemption period to the forclosed upon mortgagee. Meaning that you do not get title for a full 60 days after the close of escrow. If at any time during that 60 days the forclosed upon mortgagee can come up with the amount of money you paid for the property you must accept their money and surrender title to them.

So? How does this mean a person wanting a house cannot buy it at auction?

The sheriff’s auction process is not for the consumer. This is why banks will not make loans on these properties, there’s every chance that the foreclosed upon mortgagee might secure a means of paying and the bank would have incurred significant costs and earned little return.
It’s another reason banks wish to move properties quickly at auction instead of on the market, they’ve already been holding the property during their part of the redemption period.

That might indeed be true. But despite all that foofraw, a thing is worth what a willing buyer will offer and a willing seller will accept.

Again, you’re simply applying inaccurate assumptions because you’re dealing with something that exceeds your experience.

And you know that, how?

You obviously know absolutely nothing about the forclosure process or the auction system by which they’re sold. Investors operate on hard limites, that means the maximum amount of money they’re willing to pay for any one property.

And this is different from any other financial transaction, how?

As such a bidders first bid is usually a final bid. If another buyer is willing to reduce profit margins to get a property other investors are more than willing to take another property. With 1.2 million foreclosures last year there’s no shortage.
It’s simply not my job to educate you on the in’s and out’s of the real estate market.

Nor is it mine to educate you – but if it were, I would have the cites to back up my claims.

 

[GregoryPalamas]

CCM08,

I take it you have some experience in this area. I have a little but not much. I’ve visited the Sherrif’s sale twice and found it virtually impossible to function without the backing of some pretty heavy hitters. Most of the properties that I would have wished to bid on were quickly grabbed up by people with much more expertise, experience, and resources than I had.

Here’s a question: Is it true, as I stated earlier, that the best time to buy is from the owner at pre-foreclosure just prior to the sherrif’s sale? It is at this time that the owner is finally convinced that he has no other option if he wishes to get anything out of the house and if he wishes to avoid the foreclosure itself. Am I on the right track?

CDL