I’m just starting out and I recently went to foreclosure sale to watch to see what happens here in my area. I saw a number of seasoned bidders and they somehow seemed to know what the bidding was going to be starting at. I can see the initial loan amount in the notice, but I can’t seem to figure out how they know what the opening bid would be.
Is there some official notification of this or do they somehow contact the trustees to see what it will be?
They do due diligence.
Take the original loan amount, subtract any liens, judgements, outstanding utility bills, costs.
There’s your opening bid.
Thanks for the reply, but really?
after I posted this, I did find a trustees website where they apparently post the opening bids. I suppose this sorta answers my own question, however I’m not sure if its the opening bid or the default amount yet (it does say opening bid though).
Considering what you said though, one property I am looking at seriously on sale next week is strange. He owes 126k (on a 2 year old loan), yet the opening bid is 134k! I figure this is simply loan amount+penalties+lawyers fees. It doesn’t mesh with what you said, which would indicate that they would bid below considering any the liens on the property. It is in a great neighborhood and the house is probably worth 140k.
Aletoledo
In OK we have sheriff sales of foreclosures and most of the counties start the bidding @ 2/3 of apraised value. JDS is correct as well even though a house has a good value make sur to check for liens and other things that would cause you to lower your bid.
JDS,
Maybe you’ll know, when a property goes to a sale whether it be a sheriff sale or any other, do all other liens get wiped away after the deed has been turned over to the county? Anyone?
Phil
Assuming that it’s the same in Ohio as anywhere else: When a property is foreclosed upon and goes to sherriff’s sale, the opening bid is based on a rough appraised value by the county. The opening bid is 2/3’s of that appraised value which I’ve typically seen to be 10% lower than than the actual market value, repairs notwithstanding.
All the junior liens are wiped out. If 2nd forecloses, then 1st is still there, and a tax lien is always 1st, so a 1st mortgage foreclosure won’t wipe out taxes.
Check in your own locality, there may be by-laws and ordinances.
were do i get alist of forcloser homes from with out a fee…
OK, That makes sense. I guess its all local decisions. I would believe the bank is allowed to put whatever bid they’d like in also (not that they’d want it).
invester93, I believe the cheapest way to get foreclosure info is through the local business newspaper. There is a posting requirement for most legal matters and I suppose its turned out to be easier for everyone for a specialize newspaper to be created in local areas. Otherwise legal postings might be ‘cluttering’ the local newspaper and it might be hard to validate that posting requirements have been met. Therefore find the local legal newspaper for your county.
In Ohio, when a mortgage company forecloses the bid amouont at auction goes first to the amount owed to the county, then to the company that foreclosed, then if there’s any left over it goes to the other lienholders. Either way, the buyer ends up with a clear title for his bid amount.
Same when the county forecloses for back taxes, the other lienholders are notified and unless they clear up the back taxes it gets sent to sheriff’s sale - the bid amount again goes to back taxes first, then first then second lienholders. Again however, the buyer ends up with a clear title.
Around here, the only way you won’t end up with a clear title is on just land where the county assumes that there are no liens and thus doesn’t attempt to notify lienholders.
All of these rules though are governed by the Ohio Revised Code so I’m sure that other states may handle it differently.