Posted by David Krulac on January 17, 2002 at 13:17:32:
just about all. Besides the forced sale auctions, I also look at public auctions, which are quite prevalent around here. Many are farms, but houses and land are auctioned off too. I have even employed an auctioneer to sell some of my own properties.
Auction fever is also quite prevalent. I think that most people think that the auction is a bargain source.
However when it is not a forced sale, the prices are often high. I’ve been to auctions where the last two standing were two Amish farmers slugging it out (figuratively).
I’ve been to city, county, state and federal auctions. I’ve been to estate auctions, highway department auctions, foreclsoure sales, divorce sales, sheriff sales, tax sales, and just aboit every kind of auction.
I’ve been to sales in two feet of snow. I went to a sale in a hurricane and was the only bidder there, but the auctioneer cancelled the sale. I’ve been to several drug seizure sales too.
I am looking to bid in another private auction soon (we haven’t successfully bid yet in the past, but at that time it was HUD auctions which is quite different)
All our rentals now are places we had as primary residences, this would be the first investor purchase on a single family residence.
This Auctioneer wants $7,500 non-refundable downpayment from the successful bidder. I have never heard of an Auctioneer wanting so much money down and if my husband and are successful in the bid, but somehow getting a loan in 30 days does not work out, we would lose the 7,500K.
I wish to buy this property either as a rental or a flipper (more likely as a rental since the prices of homes in the area have not escalated much)
We did a pre-qualification with a small lender who does occasional investor loans.
Someone made a suggestion in my thread here of doing a title search on a private auctioned property. Do you all who work in auctions do this?
I would think this might be a good idea to do a title search, but one is done anyway by the closing attorney during the closing process.
I went ahead with another’s suggestion just to get a cashier’s check, my line of credit bank would not give me a pre-qualifying letter, they said they don’t do such things.
I WOULD RECOMMEND DOING ALL OF YOUR HOMEWORK (TITLE WORK, INSPECTION IF POSSIBLE) AND ATTENDING THE AUCTION WITH THE DOWNPAYMENT AND YOUR HIGHEST BID PRICE. I WOULDN’T BID UNLESS YOU HAVE A REAL “UNDERWRITTEN LOAN COMMITMENT” FROM A SOLID LENDER,WHO HAS EXPERIENCE WITH SETTLING EXTREMELY FAST.IF YOU ALREADY HAVE YOUR TITLE SEARCH DONE, YOUR LOAN APPROVED, THAN ALL YOU NEED IS YOUR APPRAISAL. JUST MY OPINION.
Sounds to me that the $7500 non-refundable down payment is the auctioneer’s fee for conducting the auction. The auctioneer may be just collecting his fee at the conclusion of the auction rather than waiting for settlement.
The fee is also a deterrent to the curious and half-hearted bidders who may be tempted to participate without the means to immediately complete the purchase.
Re: Auction down payment too high? $7500 - Posted by David Krulac
Posted by David Krulac on January 16, 2002 at 10:40:24:
I have seen that before. I have been to auctions where they want to see/touch your CERTIFIED funds before they will give you a bidders number. No bidderes number and you can’t bid. I have been to auctions where the certified funds had to be as much as $100,000. You don’t pay and you can’t play.
Talk to the auctioneer now before the sale and see if they will accept a letter of credit. They may as long as your letter covers what they think the property will go for. If its a property that they anticipate going for $100,000 they will want your letter of credit for at least $100,000.
I’ve been to auctions where they want the full 100% of your purchase price in cash or certified funds within
FIVE imnutes of the sale. Auctions are tough if you don’t have cash to play.
Re: Auction down payment too high? $7500 - Posted by David Krulac
Posted by David Krulac on January 16, 2002 at 14:02:16:
first talk to the auctioneer and see if they will accept a pre-qualification letter. you don’t want to go to the auction and get a surprise. often times I have seen where they require a deposit (non-refundable) for 10% of what they think it will sell for. Inspect the property before the auction and Determine your maximum bid, don’t bid any more.
The very first property that I bought in 1975 was at an auction and I have bought probably a few hundred since then at auction, it is the method that I use most.
David Krulac