This question was asked in another thread, but a pop-up there asked if I really wanted to reactivate a three-year-old thread or would prefer a new one. So here’s the new one.
I keep seeing listings for foreclosures and pre-foreclosures on sites like Zillow. The bit of reading I’ve done online seems to suggest that, while real estate auctions can be a little suspect (I’m having a difficult time finding out information about the condition of a property, for example, and sometimes you can’t examine a property because it’s occupied by tenants), they are worth exploring. I’m of course going to learn what I can about the process, but I think that I might use a proxy in the Bay Area (I’m living elsewhere at the moment) to do the research on such properties so that, if it seems desirable, I can either bid online or use that proxy to bid in person. (Bidding at auction evidently comes with its own skill set.) I realize that one real disadvantage of considering auctions is that it can be very unwise to buy property without seeing it myself, so another possibility would simply be to travel there when my researcher finds something really worth buying. In any case: can anyone recommend someone who does this kind of research, that is to say the real condition of the property, whether there are any liens that are not immediately visible, how long a lease tenants might have, and so on?
Zillow is useless for finding auction properties. You need all cash. True foreclosure auctions are held at the court house steps. Go to your local court house to find details.
Thank you, Elt1. Can you (or anyone) recommend someone I could hire to stand at the courthouse steps for me? I’d gladly pay for someone in San Francisco to research and bid (after of course my vetting the property).
The person you hire had better be trustworthy. They will have your cashiers checks in hand.
You would need to find local realtor with auction experience. I can recommend one who works at the Santa Clara court house. Send me a PM.
It is a lot of wasted time to go to the court house auctions. Back in 2008-2012, whenever I had enough $ (typically after a sale), I would review 40 properties every night. I would identify maybe 10 that could be good candidates. Drive by a few of those in the am, as time permits. Helper drove to some others. Of those 10, maybe 2 or 3 sold, the other auctions were postponed, sometimes cancelled. I would stay at the steps from 10 to 12, sometimes past 1:30. Yes, once I ended up getting a property after 1pm.
The 3 that sold, there would be 5, 10, 20 bidders competing with me. Most of the time I drove home with my checks still on me.
Sometimes I would stop at 1:30 for the auctions in Santa Cruz, if there were any candidates.
It typically took me 2 to 3 weeks of going there every day until I had won an auction.
So, don’t think that you could hire someone to do all that work for 1%. The drive by is very important. Cannot rely on streetview.
With auction.com and online bidding it is a bit different. I would still do drive-bys.
First: thanks for the advice, Elt1. Also, re: availability of payment. While I’m still trying to be at the auction personally, I wonder whether auctioneers allow for paying remotely, perhaps by wire transfer? Or some digital affordance? (Maybe jet courier from the Cayman Islands?)
Second, thank you, ptiemann, for the detailed description of how the process works when done effeciently. I am thinking about the problem of trying to buy at auction while not on site myself. It’s a conundrum so far.
The courthouse auctions require cashier checks made out to the signer who signs them over.
Note that you cannot predict the winning bid (price). So you need to have & pay a little extra, and you will receive a refund of the overpayment 10 days later (regular check by mail). A good idea would be 1 check of 500k and then a couple of 100k checks, and finally a few small ones like 20k each. That way you don’t overpay too much.
Thanks for the information, ptiemann. Much appreciated!