Trustee sales

I have never been to a trustee sale or helped any of my clients for trustee sale. I have had experience in aution sales but that is not that hard because the property is already forclosed where as Trustee sale is one step before foreclosing.

Any of you have any experience and care to share what things need to keep in mind before going for a bid in trustee sales. I have few clients who are searching for trustee sales.

I think it will be better if the property is vacant then its not hassele to evict. How about past dues?

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  • key is valuation estimate for all these homes that may pop up. The successful bidder has researched and made sure
    the liens are factored into the price. When other experienced bidders stay away from a property if a lone bidder gets it and others chuckle it is mostly over the additional liens that sucker ended up paying.

    There is not a lot of margin left as most sales are very close to retail price. The unknowns should be interior upgrade and how much one has to pay to stay modern.
  • Don't forget about purchasing title insurance as well. This guarantee is relatively new for foreclosure auction purchases and was unheard of for truste auction buys up until this last year. Things change when 1/3+ of real estate resale transactions involve fire-sale auction sales via non-jud. foreclosure actions.

    Several t co's are including trustee sales across CA and AZ.
  • Ensure that the note is in first lien position, lots of seconds run thru Trustee Sale Auctions and fool the novice bidder. Run a preliminary title report and then have a title company pull an actual report for you. Drive the property to ensure that there isn't significant structural damage and to see about what fixtures remain, what needs repairs so you can get a good feel of what you are going to have to put into the property to rent or sell it.

    Run comps and then set your max bid.
  • In Colorado.a public trustee sales a foreclosure after the required 120 days. You must appear at the sale have signed up for which property and be prepared to pay by certified funds by Noon. That time may vary a bit depending on the county. And you buy only the interest that is selling. In other words you may be buying a second and not a first. In colorado HOA's may only be collected for 6 months prior to the foreclosure. I would not venture into this territory without an attorney. Vacant or empty, no big deal here, it is the equity position that matters. However the banks are also showing up and bidding properties to the full amount owed if there are other bidders and they submitted it at a deficiency. Again know what you are doing before. An attorney is the best idea. But why would a client pay you if they can do it without you?
  • In Northern California in my county (Santa Clara County), the bank orders a property sale on the steps of the county court house. The buyers are to have money order, cashier checks or cash. The checks are written in the buyer's/bidder's name. The bidders would have several checks in increments of $100 or $1000 for over bidding. The auctioneer request to see the checks from all bidders before the biddings. The auctioneer writes down the names of all the bidders and the maximun amount they have for the bidding.

    The auction goes very fast, and there are usually not a lot of people bidding. Most of the homes goes back to the bank as an REO. The auction here is held twice a day/5 days a week - rain or shine, except for holidays.

    There is no preview on any of the properties. So the buyers really have to know the area, market value, exterior condition and have funds for repairs.
    • Thanks Sally. Do you know more details if the property has more than one loan with different lenders? How does that work? Does the first lender gets all the $$ or 2nd/3rd can go after later on?
      • Usually the foreclosing lender is the 1st mortgage. All junior liens are wiped out by the trustee sale. The only thing that remains is unpaid property taxes, so you might want to check with the county or your title company before bidding. Once there is a winning bid, the bidder gets a trustee's deed and owns the property (subject to unpaid taxes and any senior liens).
  • Are you talking about a foreclosure sale or bankruptcy sale? Both can be called a Trustee Sale.
    • I think in CA, trustee sale is a one step before foreclosure.
  • I would contact a Foreclosure attorney in your state as every state is different, most are more than happy to walk you trough it!
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