I have seen a bunch of foreclosure sales around that were decent houses that I would be interested in buying. They all require X amount cash on the spot to buy, is this possible with hard money? Is there anyway that this can be done without have $10-20k in available cash?
I don’t think so. In most states you have to have the money in an acceptable form (i.e. cash or certified check). This money has to be given at the end of the auction. The laws may be different where you are, but that is the normal way it is done.
That’s what I figured…never hurts to ask though…wouldn’t want to miss any good deals.
Its funny because I’m lookin at buying from a foreclosure auction and from what I’m reading the lawyer doing the auction wants a 10% bid deposit. So from what I am reading they want 10% of the bid at the end of the auction. Cool I can do that! But they want the rest in 30 days. Now is it possible to get financing at this point from a lender?
Excuse the ignorance. I’m a beginner
But they want the rest in 30 days. Now is it possible to get financing at this point from a lender?
You should have your financing lined up. It’s not difficult (as long as you’re organized) to close within a week. The problem comes from the required appraisal.
You don’t own the house until you close. Therefore, you cannot force the defaulting owner to let you (or your appraiser) in. If you’re using hard money, this may not be an issue. With mortgages, it is.
I close with cash and refinance after I own the house and can get an appraiser in.
These sales depend on local rules. You may want to read the relevant civil code. For example, where I live, in a sale where the county has already seized the property for taxes, the requirements are that:
- If a bid is $5,000 or less, that amount must be paid immediately
- Bids over $5,000 require a 10% deposit (with a $5,000 minimum) and the remainder to be paid off in 30 days
In California there are few actual mortgage foreclosures, instead there are trustee sales. The trustee holds what is called naked title – if the loan conditions are not met, the trustee can sell the property for the lender. This is where the 100% payment is required.
From the Civil Code –
At the trustee’s sale the trustee shall have the right (1) to
require every bidder to show evidence of the bidder’s ability to
deposit with the trustee the full amount of his or her final bid in
cash, a cashier’s check drawn on a state or national bank, a check
drawn by a state or federal credit union, or a check drawn by a state
or federal savings and loan association, savings association, or
savings bank specified in Section 5102 of the Financial Code and
authorized to do business in this state, or a cash equivalent which
has been designated in the notice of sale as acceptable to the
trustee prior to, and as a condition to, the recognizing of the bid,
and to conditionally accept and hold these amounts for the duration
of the sale, and (2) to require the last and highest bidder to
deposit, if not deposited previously, the full amount of the bidder’s
final bid in cash, a cashier’s check drawn on a state or national
bank, a check drawn by a state or federal credit union, or a check
drawn by a state or federal savings and loan association, savings
association, or savings bank specified in Section 5102 of the
Financial Code and authorized to do business in this state, or a cash
equivalent which has been designated in the notice of sale as
acceptable to the trustee, immediately prior to the completion of the
sale, the completion of the sale being so announced by the fall of
the hammer or in another customary manner. The present beneficiary
of the deed of trust under foreclosure shall have the right to offset
his or her bid or bids only to the extent of the total amount due
the beneficiary including the trustee’s fees and expenses.