Posted by Barry (FL) on July 19, 2007 at 10:12:09:
How do you know there is no distress? What if the guy’s been transferred, lost his job, become ill etc. and is trying to get the matter handled BEFORE it gets the point of no return.
I agree that there’s probably not, just a way to either test the market or move a property in a slow market but you never know. Last place I’d be going to buy a property though.
How’ve you been Dave? The kringle must have gotten lost in the mail!
Real Estate Auction - Posted by Andy
Posted by Andy on July 17, 2007 at 15:27:00:
A local auction company is going to be auctioning an 8 unit in late august. For the right price, i’m interested in the building. Outside of the normal due diligence that needs to be done on a property, what additional things should I be verifying because its being sold at auction.
The auction company said its a trust sale. They are dealing with the bank. The owner is deceased.
This is the first auction property i’ve considered purchasing. The property is in Missouri.
Thanks
The only difference is… - Posted by JT-IN
Posted by JT-IN on July 17, 2007 at 19:54:01:
With the auction you won’t have any contingency clauses. You are purchasing the property void of any chance to reconsider your hand being the last one in the air… So make sure you understand EVERYTHING up front.
The fact that it is a Trust sale doesn’t mean anything either. The property is owned by a Trust, the trustee will convey the deed to the high bidder. The auction shouldn’t preclude interior inspections, or thoroughly looking at all mechanical systems either. The only significance here is that the party who is deceased had enough forethought to place the property into a trust, and hence it is not being sold subject to settling of his estate. Once of the benefits of property being in trust, just because the party holding beneficial interest dies, the trust doesn’t… The contingent beneficiary is now going to be the recipient of the proceeds, that is all. Title should be clear, but you will check that. Of course read the fine print of the auction, but most of them represent that they will convey clear title, so if they can’t for any reason, that would leave you off the hook.
That’s about it… just know what you will bid in advance, and why, and stick to your game plan… Don’t get caught up in auction day fever, as many do. Since this is your first consideration of any auction property, you may also want to go extremely conservative, or simply plan on watching from the sidelines, which wouldn’t hurt either. Your call, of course. Good luck.
JT-IN
and the Question is ??? NT - Posted by Frank Chin
Posted by Frank Chin on July 17, 2007 at 16:27:57:
NT
Re: The only difference is… - Posted by Andy
Posted by Andy on July 17, 2007 at 20:19:10:
Thanks JT, those were the kind of answers I was looking for!
My max price would definately be conservative. 320k to be exact. Two months ago I sold a 7 unit in the same neighborhood for a very nice profit. I purchased this 7 unit exactly one year prior for a well below market price. Basically i’m trying to do the same thing again.
Here’s a pic. of the little beauty thats going to auction.
Re: and the Question is ??? NT - Posted by Andy
Posted by Andy on July 17, 2007 at 16:57:24:
Sorry,
A local auction company is going to be auctioning an 8 unit in late august. For the right price, i’m interested in the building. Outside of the normal due diligence that needs to be done on a property, what additional things should I be verifying because its being sold at auction.
The auction company said its a trust sale. They are dealing with the bank. The owner is deceased.
This is the first auction property i’ve considered purchasing. The property is in Missouri. Thanks
What is your concern? - Posted by DaveD (WI)
Posted by DaveD (WI) on July 17, 2007 at 17:57:57:
If you can’t get inside, you assume it doesn’t HAVE an inside! Bid accordingly. Ugh, what else do you want? Just because it is being sold at auction doesn’t make it a deal. How does this particular property fit your investment criteria?
“Outside of the normal due diligence that needs to be done…” We aren’t mind readers. What info are you looking for?
Re: What is your concern? - Posted by Andy
Posted by Andy on July 17, 2007 at 18:33:52:
I’m assuming your saying that their is no need to perform additional research behond the normal research that is done when buying a property directly from a seller or through a realtor???
I didnt think the question was that complicated but maybe i’m not explaing myself well enough.
Re: What is your concern? - Posted by DaveD (WI)
Posted by DaveD (WI) on July 17, 2007 at 19:22:30:
I didn’t think my answer was that complicated, either.
It is about definitions. How do you define “normal research?” Or “additional research.”
“… as-is, where-is, subject to encumbrences…etc” says the legal paper.
Not trying to nitpick. Just saying if you intend to bid on something, you better know what you are trying to buy. Usually, that means you have an inside track. Or, you know someone who does. Or, you have brass balls. Or, perhaps, just ignorant. Maybe stupid.
Maybe not so ignorant (anymore, but wiser nevertheless) if you have bought before at auction. But that isn’t my feeling from your post. Sorry, but this is a nasty playground for amateurs… they tend to get eaten alive. A lot like poker. If you can’t figure out who the patsy in the room is… you are the patsy.
Re: What is your concern? - Posted by EricW
Posted by EricW on July 17, 2007 at 20:11:32:
I don’t see the problem with his question. He probably should have asked something like “I am interested in a property that is being auctioned but have never been to one before. Does anyone have any suggestions as to how I should go about it because I don’t know what I am doing”. I think it is a perfectly valid question in the form that I gave and not one that called for smart a… answers.
I know if I was looking at going to an auction to purchase a property I would definitely ask here as one of my resources to find out what I need to do and how the process works. Of course I would try to visit a couple others if possible, try to talk to the auction company or any other person I could to find out as much about the process and the property in question.
Re: What is your concern? - Posted by DaveD (WI)
Posted by DaveD (WI) on July 18, 2007 at 06:16:45:
I was answering within the context of a forced sale, ie. trustees or sheriff’s sale, where my answer was quite legitimate. I missed the “local auctioneer” part, which means this is an elective auction. Different animal, my bad. An elective auction is sold to the retail crowd, flyers go out to those who qualify, etc. Just a different marketing concept is all.
Deals? Unlikely. There is no distress.