Participating in a Foreclosure auction?
I don't know much about buying a foreclosed home, but I'm wondering if it'd be worth it to check out homes in a foreclosure auction. What are your thoughts on such auctions?
Any pointers to books/articles on how to buy foreclosures in King county?
Any pointers to books/articles on how to buy foreclosures in King county?
Comments
At the auction, you need to pay cash and you don't get any contingencies. It can be difficult to get a property inspected before the auction.
The best way to get a bargain is to focus on REO, or bank owned, properties. Once the lenders buy back their homes at the foreclosure auctions they will then proceed to officially list them with a realtor. It is at this time that real discounting starts. Even then lenders are rarely willing to entertain low-ball bids. Instead, they keep ratcheting down the asking price a little bit every few months until it finds a market rate.
Unfortunately, in many markets prices have been declining so fast that the bank-owned listings will languish on the market for years since they never seem to drop their prices fast enough to catch the market. The bank is asking for $300,000 when you are willing to offer $250,000, but by the time they have lowered the asking price to $250,000, you will only be willing to offer $200,000 because prices have declined substantially since the place first came on the market.
You can look them up at the KC records web site.
http://www.metrokc.gov/recelec/records/
There are businesses that have relationships with banks and list properties in the foreclosure process before NTS. This is not public record and you often have to pay for access to that data.
Is it easier to get a good deal on foreclosure-auctions of higher-end homes ($600K and above)? OR is it all the same, irrespective of the price range?
How do actually look for a NTS property at http://www.metrokc.gov/recelec/records/ ?
Do you know of any (paid/free) good web sites that offer this info?
I do know that there are people who make it their full-time job to find 'deals' in real estate. You are competing against them and if you aren't doing it full time you will probably lose to them.
Personally, I don't want to get "a deal". There are many things that can be wrong with a property -- expecially and improved property. I would need to act quickly to land "a deal" and I wouldn't have time to do the necessary research to distinguish between a "deal" and a "lemon".
http://www.metrokc.gov/recelec/records/
Click "Records Search"
Accept the legal notice
Click "Search" next to "Official Records Search"
Under Document Type select "Notice of Trustee Sale"
Enter some recent dates.
Press Search.
Click on a NTS document and see the address how much the person owes.
Use the address to research the property on redfin.
Find a property you like then go to the address, knock on the door and make the person an offer.
There is no difference for high and low end homes at foreclosure auctions. Lenders almost always buy back the homes for the price of the mortgage. The only time you can get a deal at the foreclosure auction is if the mortgage is worth less than the market value of the home. However, these types of situations are very rare since the home-owner would most likely have sold the home already if they could have gotten enough to pay off the loan.
http://blog.seattlepi.nwsource.com/real ... 139464.asp
Basically talking about the new law that goes into effect soon here in Washington.
Be aware of potentially negative repercussions of buying a property within 20 days of foreclosure.
Thanks for the heads-up. Seems like buying a foreclosure home is more complicated than what I initially thought.
What do people consider a good deal when buying a foreclosure/reo/pre-foreclosure home? 20% below market value? 40% below market value? I do know that market-value is a questionable thing these days.
Don't think of the pricing of an REO property any differently than you would a traditional owner listing. If you think the REO is listed for a great price (that fits your budget), then go for it.
The "market-value" doesn't mean much. Whatever price you get the home for is the market price. The whole idea of segmenting the prices of REOs as being something other than "market" is barmy. Frankly, I doubt very much a lender would be willing to sell you a property for less than the market value. If it so happens that the price you buy the REO property for is much lower than most of the MLS listings in the area are asking just indicates that most sellers are unaware of the true market price. I'd also bet that the inventory is barely moving in any neighbourhood where you are able to buy an REO for 20% less than the asking prices of comparable properties.
All of these tend to result in REOs being priced below market value, i.e., below the value we would see with other comparable properties that are not REOs. If you looked at the different types of value, this type of sale would probably be better defined as an orderly liquidation rather than a traditional arm's-length sale.
However, the biggest reduction in price comes from condition. If the property is in good condition, the home will be selling for close to whatever the normal/fair market value is with some discount applied to account for the other issues identified above. It's an inexact process though and the banks tend to start high on their pricing just like everyone else does and then as time goes by, they ratchet the price down until they find a buyer willing to take the property off their hands.
If the property is in bad condition, the price offered needs to reflect the cost of making the necessary improvements, as well as compensate the buyer for his trouble. Basically, there is no rule you can apply to say how far below market an REO property will or should be, you need to look at each one on a case by case basis and figure out if it makes sense to you, all things considered.
Finally, there is the issue of what the bank is owed. Banks don't like walking away from money, and if they think there is a possibility of selling the property for what they are owed, or more, they will try to do so. Which sometimes results in REOs being priced higher than any buyer would be willing to pay for such a property, and thus, they often sit on the market for a long time.
I know folks have a hard time with this concept but fair market value is not the only type of value that exists, so, I refer you to the Wikipedia definition of value to help you understand why properties sold under different types of circumstances will have different types of value applied to them.
http://en.wikipedia.org/wiki/Market_val ... tion_Value
Yeah. Locally, there is foreclosurepoint.com and Dean Street, and I believe there is another biggie whose name I can't recall.
In King County, the foreclosure sales are every Friday 10 AM, one outside of the KC Administration Bldg on 4th Ave in downtown Seattle, the other outside of the office building directly behind the Factoria Cinemas.
Do these firms/individuals focus only of foreclosures & foreclosure-auctions OR do they help with NTS properties also?
So...are you referring to the auction itself or the short sale prior to the auction?
A lot of agents shy away from representing buyers in a short sale, as everything can be on the table with the seller's lender, including the buyer's agent commission.
Mike Garrett
Phone: 425-883-1800 x222
Windermere Real Estate/East
Here are a couple of ideas for you. I teach a class through the Seattle King Co Assoc of Realtors called, "Foreclosure; Losing the American Dream" for real estate and mortgage continuing ed credit. We often have consumers attend these classes as well. Price is $55 for Realtor members. If you decide to go, tell the person who answers the phone that I sent you and to ask for the member price. Next class is on June 18th. I'm double booked that day so I have an attorney teaching the Foreclosure class and I'm across town doing Short Sales.
I have a video of a foreclosure auction. Let me know if you want to see it and I'll try to upload it to youtube.
I agree with sniglet in that I would personally rather buy an REO instead of at auction because I believe prices are going to continue to come down for quite some time into the future around here.
You asked about lists of scheduled foreclosures. You can find those at the trustee websites. There are only really two big firms that handle just about all the foreclosures in town. Regional Trustee Services and Northwest Trustee Services. Google their company names and you'll find the upcoming foreclosure auctions.
Best of luck!
How do I distinguish a deal from a lemon from a GEM?
Crazy-ass price history:
Date Price Appreciation
Apr 28, 1989 $81,600
Sep 02, 2004 $335,000
Jul 12, 2006 $985,000
Apr 04, 2008 $838,501
It looks like the bank bought it back a month ago, and it's now REO, but what's with this:
Reposession Amount: $788,000
Shouldn't that be the same as what WAMU paid on 4/4?
And who the heck is going to pay a million for a place on an extremely busy arterial, and a skinny to boot, 4 houses down from I-5.
How could this have been anything other than fraud?
And despite the foreclosure, it's still Zillowing over a mill?!?
Try licking it.
Is there a way to filter out NTS filing by city/zip-code? Otherwise, it seems like a lot of clicking:(
The hard work will actually give you an edge. If it were super easy, there would be a lot more competition.
People used to make money doing this because it was a pain to go down to the courthouse and look the records up in person.
Won't some of the subscripion bsaed websites (like RealtyTrac) give you access to the infomation in a easier-to-query way? If so, I'd guess all serious investors/buyers would be using them?
Yes-- susbcriptions starts at $50/month :-(