Has anyone here had experience “buying on the courthouse steps”…aka picking up houses at a sherriff’s sale? How has that worked out for you?
Thanks
Yes,thats something i’d like to find out too.
I have went to several of these in several different counties. I got on different websites that the attorneys use to “sell” these properties. There is a law office in my city that this is all they do. Anyway,…
My experience only… I got the “list” of upcomomg tax sales…I researched…went and found the properties, checked the ones I wanted to “bid on”. Day of the sale (the owner has the right to pay up all lates even up to this point, so sometimes the property listed can be removed from the list)…
I am standing on the courthouse steps along with give or take 30-200 people, with my checked list and my bidder # in my hand ready to go…
Sheriff goes thru his verbage (by laws)…
Oh boy, he has just called one of my checked #'s says what the openning bid must be( this is what is owed in back taxes, any bank(lender) fees, attorney(one’s who do these) fees,any county,city,state fees list goes on…) and this has been anywhere from $500.00 bucks &up…
O.k… Out of all the sheriffs sales I have been to I have not “bought” one single property, even though I researshed my a$$ off, did all my due diligence etc. You want to know why?..
Because out of those 30-200 people there has always been some idiot that when the bidding starts at $500.00 bucks you have a numbnut that hollers out $30,000.00!!! and up! I would look at the idiot and move on… You see out of all those people their some are other Investors, some are the bankers sending in there dogs to jerk up the price, other mortgage brokers looking for a steal and jerk up the price, some are other attorneys. You have no idea who anybody is.
I remember one where this guy kept bidding on all kinds of stuff with his papers and bidding # in one hand and talking on his cell with the other! So, see he was there for some one else.
Anyway I have chose to not do these anymore at least for now, because I saw there was always going to be someone at these with either bigger pockets than mine or just stupid, one of the two. Because I was telling myself, there are lots of properties on these so everybody should play nice and just get one or two and not be pigs, but I realized real quick ain’t gonna happen…
Just my two cents.
Do it all the time & it’s worked out great if you do your due diligence in advance of the sale. Be forewarned: You will have to be aware of Federal Tax Liens, Local Property Liens, what position the foreclosing mtg is in. I would hate to see you buy a 2nd mtg or something with a huge lien on it…
Keep in mind that there will most likely by quite a few other bidders at the auction, and you will be much better off purchasing the property from the homeowner PRIOR to the auction.
I’ve heard through a couple other RE investors that there are far, far more people than normal at these types of auctions due to overwhelming amount of “get rich quick” real estate seminars that are out there currently. But I’m glad to hear that someone else on here has made some good purchases at these types of auctions…
Do you think doing a physical review of the property [as much as reasonably possible] and doing a title check/search in advance of the auction is sufficient?
Well, most of the bidders usually do a quick drive by. But, I am primarily a Preforeclosure buyer, so if it’s a property that I’m interested in & it’s going to the auction I’ve already been inside. If it’s vacant, I usually get inside & look around and if it’s owner occupied than I’ve already been in the house talking with the seller. So, I usually have a good idea of what kind of repairs need to be done.
As far as liens & mtg. Position, I usually look at the actual Final Jdg. (I’m in FL) which will display other lien holders / judg’s / etc…If you see United States of America that a fed tax lien, and will follow the prop (that’s not the only lien that follows - just a quick example). After I’ve examined the judgment, I go on my local clerk of court web page and review the owner/ prop’s court documents. This gives me a full picture of all mortgages, liens, etc… and when they were recorded. The leins which were recorded first are in the best position, and weaken down the line. You want your foreclosing lien to be #1 or you’ll have to adjust your buying strategy a bit (but that’s for another day).
I’m sure that every investor has their own little estrategy & way of doing things, but that’s how I do it in FL.
Good Luck
Where in FL are you? That’s a great place
Ive been on the courthouse steps and have found that buyers can get caught up in the moment. Competitive personalities can bid the homes up to the point its no longer a sensational deal. You have to do your homework when going to the courthouse as in looking up all details about the property, viewing the property, finding out about any other liens, the list goes on. I deal directly with the banks and have had much success buying directly through them and purchasing homes that have been in their portfolio for a period of time. I just purchased a 500K home for 210K because the home has been in their portfolio for too long. Some banks also will do alot ofwork to the home while intheir possession. The house i mentioned above they replaced all carpeting, painted the entire house, and redid part of the kitchen. Reo asset managers are great for this you just have to find the ones that deal with numerous national banks then you are set.
Hello all,
No I don’t have experience, but our local REIA group had a foreclosure attorney speak- he mentioned something SUPER important, I hadn’t thought of-
Make sure the homeowner was properly served. Turns out if someone was out of the country and robbed of their right to due process you could have a problem. Also, make sure there are no other liens on the property. He gave an example of someone buying the first mortgage!
The buyer didn’t realize the home had a second lien.
He made it sound like risky business.
Definitely not for the inexperienced.
Lorrin
I have purchased 3 properties from sheriff sales. I have had great success so far with them. They are easily the most risky investment. In Ohio the sales occur “site unseen.” I have been at sales where people will spend way to much money for a property that they do not know the condition of. If you are going to buy a property at sheriff sale make sure your margin is very high.