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Comprehensive overview of how to buy foreclosure properties at auction, whether that auction is the trustee's sale or sheriff's sale at the courthouse steps, or a ballroom-style auction of hundreds of bank-owned properties, or even an online auction.
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BUYING FORECLOSURES AT AUCTION
RICK SHARGASenior Vice President
DAVE LEESenior Vice President
PRESENTERS
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BUYING FORECLOSURE PROPERTIES
Pre-foreclosure Sale• Purchased directly from the
homeowner• Usually a Short Sale• Often require bank approval,
3-way negotiation, typically long lead times
• Traditional financing
Trustee‘s-Sheriff’s Sale• Traditional foreclosure auction
at courthouse or on location• Most often done by
professional investors• Cash required for purchase in
many states
Bank-Owned (REO)• Purchased from the bank,
through a Realtor or at an auction
• Highest discounts in today’s market
• Traditional financing
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BUYING TRUSTEE’S & SHERIFF’S SALES
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Find properties
Filter properties
Research properties
Set max bid amount
Attend auction and bid
FINDING TRUSTEE’S & SHERIFF’S SALES
Sort by:• Auction Date• Beds, Baths• Square Feet• Opening Bid• Est. Equity• HomeScore• For-Sale status
Filter by:• Auction Date• Year Built• HomeScore• Estimated Equity• Lender Name
FILTERING TRUSTEE’S & SHERIFF’S SALES
RESEARCHING PROPERTIESOpening Bid & Foreclosure Details
Use Email Alerts to be notified of any changes to foreclosure status, market status, and market rating (i.e. change in list price)
RESEARCHING PROPERTIESOutstanding loans & loan position
RESEARCHING PROPERTIESMarket value & comps
• Market value based on AVM, comparable sales, and comparable listings
• Map displaying location of comparable sales & listings
• List providing details for comparable sales
RESEARCHING PROPERTIESList prices & listing details (if listed)
SETTING A MAXIMUM BIDUsing your research and RealtyTrac Property Analyzer, set up different scenarios to determine your maximum bid.
A bid of $139,900 (asking price of home) would yield an estimated loss of more than $5,000 for this property.
A bid of 120,000 ($4k above the opening bid at the trustee’s sale) would yield an estimated profit of nearly $15,000.
ATTENDING & BIDDING
• Attend several times to observe before you attend to bid.
• Watch what the regulars do and what properties they bid on.
• Ask a regular to mentor you.
• Never go above your pre-determined maximum bid.
• Be prepared but patient.
www.realtytrac.com/liveauctions
• Bank hires auctioneers to sell these homes for discounted prices.• All Homes are Foreclosed Homes (REO)• Open to the General public (do not need agent)• Banks are motivated to sell the properties
– Better to sell than to keep on their books• Homes Offered with clean title• Buyers determine the purchase price in an impartial bidding environment• Long negotiation periods are eliminated• Closing usually takes place within 30 days of the auction, if not sooner
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REAL ESTATE AUCTIONS SNAPSHOT
TYPES OF PROPERTIES
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REO Foreclosures
Trustee Sales
Bulk Sales
Luxury Homes
Commercial Properties
Note Portfolios
AUCTION TYPES
Ballroom• Traditional
auction held in a city central to the properties offered
Online Only • Auction held
usually over several days online.
Ballroom and Online Webcast• Traditional
auction with online bidders able to place bids at the live auction
Pre-Auction • Ability to
place your highest bid to see if seller will approve
First Chance Sales• Bid on a
property before it goes to auction
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Visit Auction.com & Find your Home
Perform all Due Diligence / Open House
Register for the Auction
Prepare all auction day docs
Attend the auction.
(Online or Live)BID & WIN YOUR HOME
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1 2 3
4 5 6
STEPS TO BUYING AT AUCTION
• 1000’s of Auctioned Homes• Custom searching• Save a search alert• Brochure Download• Auction Email notification• Full property information• Save properties to your profile
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1. FIND YOUR HOME
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1.1 UNDERSTANDING YOUR HOME
• STARTING BID: The price that the bidding of the home will start at
• PREVIOUSLY VALUED: The highest price the home was valued at in the past 5 years.
• CURRENT BID: Current highest bid. The Bid you need to beat.
• Auction/Property information• View all disclosure Docs.• Make sure you do your Due Diligence• Contact Customer Service for questions• Properties are open on three separate
dates prior to auction.• View homes and do all required
inspections prior to auction
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2. DUE DILIGENCE
Live Ballroom
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3. REGISTER FOR THE AUCTIONOnline Only
• Recommend register at least 24 hrs prior to auction.
• Have Financial Docs (proof of funds)
• Prequalify if needed
• Register for auction as early as possible
• Have Financial Docs (Proof of Funds)
• Submit Credit Card for Verification prior to bidding.
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4. PREPARE FOR AUCTION DAYCashier’s check• $2,500 cashier’s check payable to yourself. $5,000 if you plan to purchase
multiple (Depending on auction)
Checkbook• Personal check to pay balance of 5% Earnest Deposit. 15% for multiple
properties
Valid ID• Valid Government issued Photo ID for involved parties
W2• We recommend you bring the last 2 years of W-2 and last 30 days pay
stubs
We have partnered with the country’s largest lenders. Take advantage by pre-qualifying. Just click on financing button on property page.
You are free to use your own lender. However, be sure that your lender is fully capable of helping you finance your desired home.
Some properties are not eligible for financing. These properties can only be purchased by Cash. Look at the property pages to see if a property is cash only.
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FINANCING
You are free to use your own lender. However, be sure that your lender is fully capable of helping you finance
Cash OnlyVisit Auction.com to search
Our Lenders Third Party Lenders
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5. AUCTION DAY
Bidding is
FAST30 Properties
Per Hour
Highest Bid
Financing Available
Free Pre-Qualification
30 Day Closing PeriodSold Subject to
Arrive Earlyand Check-in
Properties that fall out of sale before the end of auction may be re-auctioned
ARRIVAL
BIDDIN
G
WIN
NING
FINANCE
CLOSIN
G
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6. WINNING• Your Winning Bid $200,000• 5% Buyers Premium +$10,000• Total Purchase Price $210,000
• 5% Earnest Money Deposit $10,500• Cashier’s Check -$2,500
*$2,500 or $5,000 depending on auction
• Remainder-Personal Check $8,000
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RECAP: WHY REAL ESTATE AUCTIONSSummary• All Banked owned properties
Aggregate your sales (agents/Brokers)• Value in selling more
Homes at your price• Buyers set their Own Purchase Price
No Liens- Clean titles• All properties have clean title reports
Eliminate long Negotiations• No back and forth. You bid, you buy, you close!
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RECAP: WHY REAL ESTATE AUCTIONSWhy Auction?• Lenders want homes off books• Auctions bring the market to the seller• Best value for buyers and sellers
Why Now?• Best time to buy• Low Mortgage rates• Buyer’s market
What Now?• Clients must be pre-qualified• Bid within means• Visit Auction.com Broker Registration, Notifications
• Check out the FAQ section. • Take advantage of our #coffee&tweet
(Where available. Sign up for the email notification to stay up-to-date)
• Take a trial online bidding run @ Http://www.auction.com/demo
• Insider Insights.
• Sign up for a discounted RealtyTrac subscription: 800.306.9757 or http://www.realtytrac.com/auctions• $99 for four months (50% off)• $199 for 12 months (67% off)
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HELPFUL TIPS TO MAKE IT EASIER
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QUESTIONS