I appreciate the various comments from everyone. I do not type very fast, so I normally do not go into to much details. However, I was responding to an ad in the public notices titled Sheriff’s Sale. I have been investing in R/E part time for the last ten years and I have purchased and sold several properties and understand the foreclosure process fairly well, however I have never been to the courthouse steps to attend a Sheriff’s Sale. Anyway, I contacted the person in the ad and spoke with the bank employee who will be at the courthouse steps handling the sale for the bank.
The house will be unlocked for 1 hour for inspection and shortly afterwards the sale will take place at the
courthouse steps. Based on the information I gathered, it looks like my best opportunity may be to try and purchase from the bank after the sale. What should a person offer assuming the bank is the high bidder?
You’ve received some excellent responses. I?d just like to add one comment.
If you?re going to deal in the foreclosure market in Texas, you ought to get the terminology right. We don?t have Sheriff?s Sales in Texas. Foreclosed properties are auctioned at Trustee Sales or Constable Sales.
Ron * offers some valuable info for you to understand and follow. The risks are abundant, but the rewards, if you educate yourself and understand these pitfalls, can be extroardinary, as well.
I too, advocate Sheriff Sales for “Experienced Investors Only”!
However, let me answer your 2 questions, regarding buying property at SS.
Should you try to buy before, (at), or after the Sale? YES, YES and YES! Yous should try to buy the property at each juncture, (assuming that you are experienced and understand the hazards). Each one of these presents specific buying opportunities, as well as circumstances that you may want to shy away from, depending upon Owners’ equity and circumstances. e.g. Owner has equity, and not too far behind, with no judgement liens, then try to buy directly from Owner, before the sale. Now let’s say that the Owner has an IRS lien, State Tax liens, other judgements, and a seriously delinquint mortgage(s), then the best (only) place to purchase this property is from the sale itself, or possibly from the lender, after they have successfully gotten a clear deed to convey to you. One of the advantages of a SS, is to clean up the title on a proeprty, that may be mired with the Owners financial or title problems.
What are Pros and Cons of buying at SS? Well let me deal only with the Pros, since Ron * has adequately briefed you on the drawbacks, which are numerous. The benefits are that the property that successfully reaches SS, will sell, due to the auction environment, to the highest bidder. It is a right now, immediate process. I attend a SS every week, where about 25 properties are auctioned, on average, in about 25 minutes. Presto, over, finite’. Miracles are worked and lives are significantly changed forever, all in a matter of this process. The other upside is that if, and I say this emphatically, “IF” you know and understand the market and the process, you can make a SUBSTANTIAL living, buying and reselling SS property.
That is primarily what I do, usually between 15 to 20 of them a year. I love the process, take extroadinary risks, recycle these homes for retail buyers, and make extroardinary profits. Just the way the free enterprise system should work. You gotta love a country where all this is possible.
If you can’t answer this question for yourself, I would guess you should not mess around with sheriff’s sales.
My recommendation is that only people with a few years of real estate investment experience and knowledge should attempt to buy properties at foreclosure-type auctions. First get out there and learn about real estate for a while. Then, if you are still interested in foreclosures, learn about them. I do not recommend trying to do both simutaneously.
A while back a couple of us had fun lising off many of the risks of investing in foreclosure sales. And we still missed a couple of the important ones.
This is going to be brief:
Lawsuits from former owners
Not seeing the inside
No disclosures from the sellers
No survey
No escrow company
No attorney
No termite inspections and reports
No roof inspections and reports
No septic or well reports, for rural properties
No title insurance
No guarantee about what is owed on the property when you buy it
You pay all cash, so any loss is strictly yours
Have you heard about the Sacramento, CA, area foreclosure investor who refused to cooperate with other bidders to “chill the bidding” to get good deals? I was told his body was found floating in a lake.
What are the pros?
No paperwork
Good prices, if you have done your homework properly
Re: Sheriffs Sale In Texas - Posted by DL Cunningham
Posted by DL Cunningham on June 27, 2001 at 09:01:36:
I was a bank VP in Texas bank for 9 years before moving to Colorado.
Texas is pretty liberal when it comes to foreclosures. The only “glitch” is the lender must pay at least 75% of appraisal. I don’t know what the requirement is for an individual. I know banks welcome someone outbidding them.
The owner can get a restraining order and stop the first sale. This can give them time to go to file bankruptcy. Otherwise, it goes to the highest bidder for cash.