Real Estate Auctions

Real Estate Auctions

Buying Homes at the Court House Steps

Approximately 70 percent of the homes sold in South West Florida are sold for cash or are deals involving a bank or the court house steps (now may courts do this on line).  It therefore stands to reason that Market America Realty and Investments, Inc. has spent time becoming experts in these fields. If you are interested in buying a home in South West Florida chances are very good that you will become involved in a SHORT SALE, an REO, or buying at COURT AUCTION. In each of these cases, as indeed in life – KNOWLEDGE is POWER. The more informed you are about the processes the higher your chances are of success.
To improve success at Market America Realty we have immersed ourselves in these arenas. At the company we have the following profit centers:
·         Retail – Conventional residential home sales
·         REO’s – The direct selling of foreclosed property now owned by the financial institutions
·         Short Sales – The representation of sellers that need to sell their homes below what they owe on their mortgage.
·         Court House Sales – Representing buyers that wish to buy from the court system at auction
·         Commercial Sales and Leasing
·         Residential Leasing
·         Property Management
What I would like to talk about today is Court House Sales. To read a review of the short sale process click here or go tour new website www.marketamericarealty.info.
I also have written an article in the past about how to buy an REO – to go to that article click here.
Knowledge is power  – Investors make money when they buy, not when they sell.  When the buying decision is made the investor is in control, when he wants to sell, the buyer is in control. This is why it is so important to be an informed buyer, and this is doubly true at the courthouse.
There are about 80 homes a day auctioned off on line for the Lee County Court System. Most of these homes will be taken back by the bank. The new on line system is actually making a smaller percentage of auctioned homes available for actual auction to the public. Because of time constraints in getting the homes into the on line system, the banks are less likely to be prepared to let these homes go at less than the judgment amount.
Market America Realty has, two weeks before the auction date, a summary of all homes that are SCHEDULED to be auctioned in both Collier and Lee Counties. We know the judgment amount, the attorney involved, the name of the debtor, and all  publicly available information which includes the address and a photo of the property. If there is a property that is of serious interest, we perform a BPO (see Blank Sample Here for your use) take a series of fresh photographs and order a title abstract. (We perform this service for a fee for our clients. If you would like to discuss this email me at GFous@marketamericarealty.com)
The title abstract is important because this will tell us if there are any liens that will not be discharged at the foreclosure such as IRS liens or other government liens. A well preformed BPO will give us an indication of the market value of the property.
There still are things that cannot be positively determined without a visit to the property such as the presence of defective Chinese drywall, whether or not the appliances and air conditioner are present or if the home has been vandalized. In most cases the interior of the home cannot be inspected at all unless the house is currently listed for sale. A personal visit to the home is conducted, an occupancy check is performed, photos taken of the home and neighborhood, and a property status report is generated by our REO specialist. Neighbors or tenants are interviewed when possible. The BPO is generated and a photo addendum sheet is attached.
The age of the home may place the incidence of bad drywall high, and if the home falls into a suspect date and builder class, we will assume that it has the bad drywall, absent of any contrary evidence.
It is foolish and a gamble to bid at auction without any prior knowledge of the home. I will tell you that it is done every day, however.
Some, but not all of the things that you may run into:
·         No appliances
·         Code violations ( pools, fences, electric,  illegal additions or improvements)
·         Pests (Wood destroying organisms, rats, bees)
·         Evictions required for squatters or previous tenants.
·         Foreclosure errors in straps, boundaries, address of the home
·         Stolen copper, in-operable wells, mechanical issues
·         Defective Chinese Drywall.
I will tell you that we have seen all of the above – and while you may try to determine all the potential problems, I am sure there are some we have not seen yet. Buying at the courthouse is risky and even with all we do for our clients, all we do is lower the risk, we do not eliminate it or guarantee success.
Once we have possession of the home our asset management process kicks into action. We handle about 30 homes a month through the process of evaluation of value, arranging improvement for the home, and putting it back on the market. Our system generates weekly inspections, ordering of utilities, potential code violations, and general maintenance of the home to community standards. Most of these homes are generally on the market for no more than 60 days if the goal is to sell. About one third of the homes we acquire for clients are put into a rental program or are occupied by the buyer.
Buying at the court house step can be rewarding. But please: Be Prepared.  Remember, knowledge is Power

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