OfflineI have looked at 2 homes both going up for auction in the next two weeks.
These homes are in excellent locations.
One is a beautiful home on 5 acres with cathedral ceilings, fireplace, deck with above ground pool, assessed at $414,000. Going up for auction the 22nd. Is a Fannie Mae home. Over the summer tried to get info from Fannie Mae, but never could get anywhere. Spoke to the realtor yesterday, who told me that Fannie Mae won't work with anyone with a foreclosed home until the home is with a realtor. Is this true?
He told me that if I put in a cash offer for $240 he is positive they would take it. I don't have cash, but feel they may come down more. He said they don't like doing the auctions. The home does not need any major work at all, I had a friend who builds expensive homes goes through it, he was impressed. This home was taken care of, and the people did not trash it when they left. Any thoughts?
The other is a smaller ranch home. Assessed at $212 and they are asking $139 but will take offers. It goes for auction the 17th. This place does need some TLC but is a very nice home with hot tub/sauna and beautiful fenced yard. I know these places would move because of their locations. And I only have 4 buyers, 2 of private people looking. I did email both of them.
But, I must do a proof of funds on both, and if I could finance them, I'd lease option or hold, they are both really good properties.
Any suggestions. I have never done a deal yet, but hard to walk away from these two.
Sandi
Auction houses
Posted on: Fri, 10/08/2010 - 01:15
Auction houses
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Have one more question.
Before persuing this further, will the realtor have the title search done, or do we need to do this before the offer?
Sandi
We have bought a few Fannie Mae foreclosures. It is true they will not deal with you direct, the property will be listed with a RE broker. If the property is not sold in a specific amount of time, it then goes to auction with an auction company like REDC.
The RE agent wants to sell the property before it goes to auction because they get their full commission & possibly an additional bonus. After it goes to auction they only get like 1% commission. As for knowing what they will accept, I find it hard to believe. Our latest project is a Fannie Mae that was listed for 39,900 on the MLS for about 6 weeks, they dropped to 34,900; we offered 20,000 & it was rejected, not even a counter offer. Three weeks later it went to auction with REDC, we bid-ed 20,000 & won the high bid. They accepted that amount & made much less than if they would have taken the 20,000 through the RE agent ... go figure !
Now we have paid cash for all of our foreclosures,& yes you do need POF, but if it goes to auction you can get financing prior the the bidding through the aucton company.
Keep in mind you must hold the property for 90 days. If you sell prior to that you are only allowed to make about 20%.
Whether it is being sold through RE or at auction, do you not need to have a title search done. The law firm/title company representing the banks takes care of all that, not the realtor.
gceriani
thanks for the info. He did mention it was through REDC. I may have to pass on this home, as I don't have funding or a job to get approved. But the house is really beautiful and location near the State Forest.
But the info helps me in my searches. Thanks for answering, it isn't always easy to find anyone to answer, so very much appreciated.
I will let you know what happens.
Sandi
You're very welcome. Jill & I have purchased several properties through county auctions & private auctions, but this first one through REDC was a trip. Very fast paced, they were auctioning off a house every minute ... so you really must be on top of your game.
Hi
Thanks for the info. I may still put an offer in one the smaller ranch. That goes up for auction on the 17th. A friend of mine is doing this as my partner, he builds homes. The house that is worth $414,000 I will pass on. Had a buyer interested if I put it under contract, but she didn't like the taxes over $5,000.
We are putting in the offer before the auction on the small ranch.
I will always be sick about losing the other one, but more than I could handle. The realtor said they would for sure accept $240 so that is a good equity, but I'm too nervous to try that one.
REDC has an auction coming up and so does Hudson and Marshal. So I will go to watch, and will let you know what happened.
Thanks again for answering me.
Sandi
Make sure you check the terms/conditions for each company because they may differ. Also remember that there's is minimum of a 5% buyer's premium on top of your bid. We've even seen buyer's premiums at 10%. Also if it's a government backed loan like Fannie Mae, you are responsible for paying title insurance & doc stamps closing costs, they only pay the property taxes.
Thanks!
I did not know that about Fannie Mae auctions. I have been to Williams & Williams, but this is my first from REDC and Fannie Mae.
My budget will be very tight and those extra costs could really hurt.
I am going in with my friend to put an offer on the ranch and we are doing that tomorrow, so will let him read your replies.
If they turn it down we will be going on the 17th for the auction and the info helps us.
Have a blessed day and thanks.
Sandi