"In California, 97% of homes auctioned are bought back by the lender"

If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?
 
[quote author="momopi" date=1216338810]http://www.latimes.com/business/la-fi-homesales17-2008jul17,0,3250369.story?page=2



<em>Few of those homes find buyers at the auction. In California, 97% of homes auctioned are bought back by the lender because of the lack of higher bids, ForeclosureRadar said. Those homes are then sold by lenders on the open market, sometimes at prices even lower than the auction price.</em></blockquote>


<strong><em>Translation: opportunity for cash buyers with market knowledge.</em></strong>
 
[quote author="tenmagnet" date=1216339596]If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?</blockquote>


It has all been explained at length in the Foreclosure and Distressed Property thread. Start at the beginning.
 
[quote author="EvaLSeraphim" date=1216342778][quote author="tenmagnet" date=1216339596]If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?</blockquote>


It has all been explained at length in the Foreclosure and Distressed Property thread. Start at the beginning.</blockquote>


Thanks for the reply.

I checked that thread before I posted.

There's no mention of bidding at the courthouse process.

Maybe I overlooked it or missed it.

Perhaps you can help
 
[quote author="tenmagnet" date=1216339596]If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?</blockquote>


ten,



It is a remarkable process. I've been several times recently to note who is making moves and who isn't. Investors show up with a series of cashier's checks in varied increments, very rarely cash, and buy the properties on the spot. Some of these guys roll with several $million on them through the heart of Santa Ana. They've done their homework hopefully, finding out about whether the property has squatters, what condition it's in, and what current market value is for it. When a property has some equity in it (say the former owner paid 50% cash and has heloc'd themselves into ruin) the bidders show up. At Santa Ana, the "auctioneer" rattles off the parcel number, disclaimers (you are buying this property AS IS WITHOUT WARRANTY OR RECOURSE), and then announces the opening bid amount. Interested parties each show the auctioneer that they have sufficient $$ to cover their max bid, and then they go to it.



Different areas have their own "specialists." For instance, most everything with value in it in Westminster and GG is picked up by a single buyer affectionately referred to as "Buddha," who profits off of the margin that he resells them for.



Anyone interested in an IHB field trip?
 
[quote author="tenmagnet" date=1216343085][quote author="EvaLSeraphim" date=1216342778][quote author="tenmagnet" date=1216339596]If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?</blockquote>


It has all been explained at length in the Foreclosure and Distressed Property thread. Start at the beginning.</blockquote>


Thanks for the reply.

I checked that thread before I posted.

There's no mention of bidding at the courthouse process.

Maybe I overlooked it or missed it.

Perhaps you can help</blockquote>


Just show up with a cashiers check. They will announce the property location and disclosure details along with the minimum bid. If you want to bid, you walk up to the auctioneer, tell him your bid (usually a penny over). If someone else wants to bid, they will up it $100 or $1000, it will go on until someone bows out. I have been to the auction about 10 times this year, I have only seen true back and forth bidding war once. Like the article states, most of them are just going back to the bank.
 
[quote author="IrvineRealtor" date=1216343264]



ten,



It is a remarkable process. I've been several times recently to note who is making moves and who isn't. Investors show up with a series of cashier's checks in varied increments, very rarely cash, and buy the properties on the spot. Some of these guys roll with several $million on them through the heart of Santa Ana. They've done their homework hopefully, finding out about whether the property has squatters, what condition it's in, and what current market value is for it. When a property has some equity in it (say the former owner paid 50% cash and has heloc'd themselves into ruin) the bidders show up. At Santa Ana, the "auctioneer" rattles off the parcel number, disclaimers (you are buying this property AS IS WITHOUT WARRANTY OR RECOURSE), and then announces the opening bid amount. Interested parties each show the auctioneer that they have sufficient $$ to cover their max bid, and then they go to it.



Different areas have their own "specialists." For instance, most everything with value in it in Westminster and GG is picked up by a single buyer affectionately referred to as "Buddha," who profits off of the margin that he resells them for.



Anyone interested in an IHB field trip?</blockquote>




Excellent post, thanks for the insight.

Exactly what I was looking for.

Let?s say for example 50 Winding Way comes up.

Do I need you need the full $1.076M cash amount or will they accept something like 50% down and allow you to finance the rest?

Not looking for investment properties, primary residence.
 
[quote author="graphrix" date=1216343630][quote author="tenmagnet" date=1216343085][quote author="EvaLSeraphim" date=1216342778][quote author="tenmagnet" date=1216339596]If the auction is at the local courthouse so do you just show up to the courthouse with a check and bid

How does this process work?</blockquote>


It has all been explained at length in the Foreclosure and Distressed Property thread. Start at the beginning.</blockquote>


Thanks for the reply.

I checked that thread before I posted.

There's no mention of bidding at the courthouse process.

Maybe I overlooked it or missed it.

Perhaps you can help</blockquote>


Just show up with a cashiers check. They will announce the property location and disclosure details along with the minimum bid. If you want to bid, you walk up to the auctioneer, tell him your bid (usually a penny over). If someone else wants to bid, they will up it $100 or $1000, it will go on until someone bows out. I have been to the auction about 10 times this year, I have only seen true back and forth bidding war once. Like the article states, most of them are just going back to the bank.</blockquote>


Didn?t see your post initially, thanks for chiming in.

Do you have to have the full amount on hand?

Say the property on Winding Way, BoA bought it for $1.076M

Would I need to have a check covering the total amount $1.076M, in order to buy it at auction?
 
[quote author="tenmagnet" date=1216343915]Excellent post, thanks for the insight.

Exactly what I was looking for.

Let?s say for example 50 Winding Way comes up.

Do I need you need the full $1.076M cash amount or will they accept something like 50% down and allow you to finance the rest?

Not looking for investment properties, primary residence.</blockquote>


Cash only. No financing. You must come up with the minimum bid at least, and hope that the "regulars" don't bid you up just out of spite to keep you and your compadres from getting any ideas on making regular dips into their profit pool.
 
[quote author="IrvineRealtor" date=1216344184]



Cash only. No financing. You must come up with the minimum bid at least, and hope that the "regulars" don't bid you up just out of spite to keep you and your compadres from getting any ideas on making regular dips into their profit pool.</blockquote>


Okay, I get what your saying.

Just to clarify my thinking, if were talking Winding Way hypothetically, assuming I out bid the others and the bank, I would then need to present a cashiers check for $1.076M to get the house. Is that right?
 
Example:



You're there for Winding Way. The minimum bid posted ends up being $1.05M. You think the home is a "value" up to $1.3M. You bring a cashier's check for $1.05M plus a series of others in increments of $100K, $50K, $10K, $5K, and $1000. You finally outbid Buddha who drops off at $1,075,100. You go inside the courthouse after all of the properties are finished and hand over checks that add up to $1,076,000. The home gets recorded in your name and it's yours. From what I understand, the court will send you a check for the difference in a month or so.



You could just bring a single check for $1.3M, your max bid, but then you'd be out a big difference (if you won) until you got your balance back.
 
[quote author="IrvineRealtor" date=1216344711]Example:



You're there for Winding Way. The minimum bid posted ends up being $1.05M. You think the home is a "value" up to $1.3M. You bring a cashier's check for $1.05M plus a series of others in increments of $100K, $50K, $10K, $5K, and $1000. You finally outbid Buddha who drops off at $1,075,100. You go inside the courthouse after all of the properties are finished and hand over checks that add up to $1,076,000. The home gets recorded in your name and it's yours. From what I understand, the court will send you a check for the difference in a month or so.



You could just bring a single check for $1.3M, your max bid, but then you'd be out a big difference (if you won) until you got your balance back.</blockquote>


Thanks for breaking that down the way you did, made a big difference.

Really helped me get it.

Felt like I was on the sidelines talking to the coach before heading back to the huddle to call the play.

Can?t imagine there being that many individual bidders capable of producing a cashiers check north of $1M, is that why the banks are the winning bidders?
 
Man... that IR2 is a quick study. I'm so proud of him!



I would also add that if the lender is not BofA (the stingiest and most stubborn lender on price), then the lender will drop the minimum bid below what is owed on the note. For example, <a href="http://www.zillow.com/HomeDetails.htm?zprop=51675093">51 Bradford here had $470k owed</a>, but the minimum bid was $352,750, and someone picked it up for $352,750.01. A nice discount from the 2003 price of $385k.



<blockquote><em>*skek wants to attend the first auction at which an IHBer bids on a property. We could form a little cheering section and harass any other bidders into surrender!*</em></blockquote>


You know that no_vas will be there for that day. He can have the title of official IHB harassment manager.
 
[quote author="IrvineRealtor" date=1216343264]Different areas have their own "specialists." For instance, most everything with value in it in Westminster and GG is picked up by a single buyer affectionately referred to as "Buddha," who profits off of the margin that he resells them for.

</blockquote>


I'm assuming there's a fair amount of gentlemens agreements amongst the regulars so they don't step on each others toes.
 
<em>Can?t imagine there being that many individual bidders capable of producing a cashiers check north of $1M, is that why the banks are the winning bidders? </em>



A related story:



I am a fisherman. I've always loved it. (The pasttime is not too different from Real Estate, actually.) My grandparents used to take us grandkids out to Lake Cuyamaca in "the Vehicle" and go RV camping during Summers when school was out. We were free to do just about anything we wanted as long as we were within shouting distance of the campsite. While my brothers would chase squirrels, rabbits, frogs and snakes, I would fish. I fished from the shoreline all day long and would only come back when required for meals and sunscreen. I didn't want to miss the chance to catch a nice rainbow trout. I would be out at the water all day long.



My grandfather, Herb (a classic grandfather name, by the way), would by contrast, come out in the morning, spend 30 minutes dropping bait next to mine, and bring a checkers board. Rarely would we get a game in, because he was usually reeling in a fish or helping net one of mine. But he always brought that board.



After a bit he'd head back to "the Vehicle" and read or nap. As a Vice Principal at the local school, he'd certainly earned some rest over summer. He'd show up again at dusk and it always seemed like as soon as he got there, the "bite" would be on.



We would head back and compare notes, and I would be so proud on the days when I happened to bring home a bigger stringer. But those days were rare. He'd spend 1 hour to my 12 and would usually outproduce me. At the time I just thought he was lucky. Maybe he was.



True story.



To answer your question, "Why are the banks 'winning' so often?" Maybe they're lucky, or maybe the old pros know when to fish.
 
I don't think B of A has had too many foreclosures. When I first started digging around for REO's I'd go to the banks' sites that listed their available inventory. Countrywide was astonishing, but B of A didn't have many. I just searched on their site again today and saw 237 total for California with only 9 in OC, which is the most I've seen. There were usually only 3-6 in the county.



<a href="http://bankofamerica.reo.com/search/propertysearchresults.asp?propertytypeid=&stateid=CA&county=orange&city;=&pricelow=0&pricehigh=100000000&bedrooms=0&bathrooms=0&zipcode;=&propertyall=0&x=15&y=9">B of A REO's</a>
 
[quote author="graphrix" date=1216347412]

I would also add that if the lender is not BofA (the stingiest and most stubborn lender on price), then the lender will drop the minimum bid below what is owed on the note. For example, <a href="http://www.zillow.com/HomeDetails.htm?zprop=51675093">51 Bradford here had $470k owed</a>, but the minimum bid was $352,750, and someone picked it up for $352,750.01. A nice discount from the 2003 price of $385k.

</blockquote>




The example you gave the starting bid was less than the amount owed.

Is that normally the case?

Do they publish or announce the min./opening bid in advance or do you have to show up for that?



Can you speculate on Winding Way, what do you think opening bid was?
 
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