Dave Roberts has a first person account up of a recent foreclosure auction down at 575 Administration Drive. If you've never attended one of these it is well worth the read. Here is a snippet:
Finally, on the sixth try, we got an active auction going. The opening amount for this property was only $62,000 and a series of four bidders made their way to the auctioneer to demonstrate their financial bona fides and provide their names. I should mention the auction master made it clear that cash or cashier's check were the only legal tender for the auctions and that even though she might say "sold" to a high bidder, until the money was in her hands, the bidding was still open...
There would be a long pause, much talking on cell phones, wandering back and forth on the plaza and then the fateful words, "plus 100". This went on for about an hour at which time the winning bidder (pictured with the phone to his ear (also the main Mr. Plus 100)) got the right to pay $128,000 for the property. I think that was probably a good deal, but several bidders had stopped at around $115,000, so maybe the deal isn't as good as I thought.
What I want to know is should I bring several cashier's checks in $50K, $10K, $1000 plus 10 $100 bills? Or do I get one big cashier's check and they will refund me the difference on the spot with a government check?
ReplyDeleteOr do I win the bid, run to the bank, and run back with a cashier's check hoping that now one out bid me with cash on spot?
Carrying around a lot of cash is asking for trouble.
I should add to the my comment above. I doubt I would involve myself until at least late 2011 as pricing pressure will continue. County auctions should be a great place for a deal since you eliminate the buyers who need financing (is there a loophole around this?).
ReplyDeleteNo,Out at the peak it is a cash market.It does require self discipline and doing your home work.You are buying "as is" and your right of inspection is limited to say the least...so unless you are willing to walk away from anything that is not a screaming deal,don't bid at all.go to a few auctions and watch,you will soon see the difference between the knifecatchers and the investors who know what they are doing.Are you a contractor? can you make a reasonable estimate(guess) of the cost to repair or renovate from an exterior inspection?There is good money to be made at auctions by those who do their homework...
ReplyDeleteOut at the Peak,
ReplyDeleteMy understanding is that if you are the successful bidder they will refund any excess money from your payment within a few days of the transaction. It makes the most sense to bring one cashier's check for the highest you are willing to bid. If you feel like getting multiple checks totalling the same amount, that would work fine, too.
Cash would be a mistake. As far as I could see there wasn't any special security.