I received this email from a reader wondering about foreclosures:
I have an idea for a series of articles. I’m interested in non MLS ways of purchasing homes. I’d like to know how to find and properly research homes for sale by the lenders or auction companies directly.
My focus is Snohomish County, however I’m sure there are readers interested in other areas as well.
I have several questions:
- Is there a way to find lists of properties going up for auction without paying a subscription service like realty track?
- I’ve heard of auctions “on the county steps”. What does that mean? Are all auction homes sold that way in Snohomish county or are there private auctions as well?
- Once you find a property you’re interested in, how should someone research the property to find out about legal or title issues with the property?
- Is there any way to get inside to view auction properties?
- Is it possible to get these properties inspected before the auction?
- I’m guessing that someone purchasing real-estate at auction must be paying cash. Is there any other strategies for tying up the property while securing financing?
- Any other advice from folks investing in these properties would be appreciated.
Good questions. Here’s my best shot at some answers:
1) Yes. The most comprehensive way is to search your county’s online public records for notices of trustee sale. Snohomish County’s site is here. I’ve listed other Seattle-area counties on the Real Estate Resources page. Note that not all of the homes that receive a notice will actually end up selling, but there should not be a home that goes to auction that does not first receive a notice of trustee sale.
2) The phrase is “on the courthouse steps,” and it literally means on the front steps of the county courthouse. Here’s a quote from a Notice of Trustee sale I just pulled from the Snohomish Records site:
Notice is hereby given that Quality Loan Service Corp. of Washington, the undersigned Trustee, will on 4/8/2011, at 10:00 AM, on the steps in front of the North entrance to the Snohomish County Courthouse, 3000 Rockefeller Avenue, Everett, WA 98201 sell at public auction to the highest and best bidder, payable in the form of cash, or cashier’s check or certified checks from federally or State chartered banks, at the time of sale the following described real property, situated in the County of SNOHOMISH, state of Washington…
As the description states, the auction actually takes place in front of the courthouse. As far as I am aware, every foreclosure will go through this process. There is no “private auction” for foreclosures. There may, however, be a short sale or some other form of arrangement made between the borrower and the lender that avoids sending the home to auction.
3) If you’re interested in a property that is headed to auction, I suggest contacting a real estate attorney to guide you through the possible title issues and other legal pitfalls.
4) & 5) Most likely, no. Up until the auction, they are likely still occupied by the borrower. The only way to get in to see them would be if the borrower lets you in, which is not likely.
6) You are correct. As quoted above, the public auction is a cash-only sale. There are some companies that can help an auction buyer secure pre-auction financing, but I have not researched this in depth.
7) My main advice: Be careful! Buying at auction carries a lot of unknowns, and therefore a lot of risk. Most of the people you will be competing against are seasoned investors that know exactly what they are looking for, and know a good deal when they see one. The chance that you will be able to score an amazing deal at auction with little to no complications is slim.
Finally, I will mention that for those who are serious about auction properties, I have heard some good things about Vestus. I have never used them, nor have I researched them to learn more about what exactly they do or what value they offer, but from what I have heard second and third hand, they are at least worth looking into.
Good luck out there!