The FAQ's of House Flipping.
If you are new to the world of home foreclosure auctions, you probably have
a million and one questions. The first of which is, “where do I start.” Let’s start with a few FAQ’s.
When are the foreclosure auctions held?
Every Friday starting at 9:00am or 10:00am
Where are the foreclosure actions held?
At the entrance of the county courthouse building.
Who auctions the properties?
The properties are mostly auctioned by a person, who is referred to as a “caller” and is hired by a trustee. Sometimes the county sheriff will auction the property and sometimes the trustee themselves will action the property.
What is a trustee?
In a foreclosure auction, a trustee is a person or entity that has been given the authority by another person or entity to perform the foreclosure process.
Who owns the properties that are auctioned off?
The last person, people or entity to purchase the property continue to own the property until the auction is complete. The highest bidder at the auction will own the property after the final call.
Can I view a property before the auction?
You may view any property as long as you abide by the Washington State trespass laws. Regardless if the occupant is an owner or tenant, they have the right to refuse people from entering the property. A trustee, bank, lien holder etc… cannot give you authorization to enter a property and entering any property without permission is considered trespassing. Every house is different and you should use your best judgement as to what is appropriate. The person or entity who’s house is getting foreclosed may not take kindly to an “investor” knocking on their door or rummaging through the backyard. On the other hand, you may come across occupants who will open their doors and give you a tour of their home. You may also run into occupants who will yell at you before you step foot on their property. The best rules of thumb are: be courteous, be cautious, be legal.
How do I pay for a property at an auction?
All properties must be paid for in full with one or more cashier’s checks immediately after the auction ends. You must have the check(s) in hand before the auction starts. The most practical way to achieve this is to get a series of cashier’s checks from your bank or credit union starting with a few large denominations and several small denominations. The total of all the checks should equal the highest amount you are willing to bid on the property. When the bidding is done and the auction for the property closes, you give the caller the necessary amount of cashier’s checks to equal or exceed the price you bid on the property. The trustee will mail a refund check to you for the difference of the price you bid on the property and the amount you paid in excess of the bid amount. Typically, it takes 10 – 14 days to receive the refund.
Can I get a loan to buy a property at an auction?
Yes, there are lending firms available that will bring cashier’s check from their bank or credit union for you and loan the money to you right there on the spot. These types of lenders are called hard money lenders or investment lenders. They are high interest, short term loans designed for people who either want to sell the property quickly for profit or refinance the hard money loan with a mortgage lender. The refinance pays off the hard money loan and a new 15, 20, or 30 year mortgage is created by an institutional mortgage lender.
How much money do I have to put down to buy a home at the auction?
If you are planning to obtain a loan through a hard money lender at the auction, you will typically put 20% of the purchase price down. If you are not planning to use a hard money lender, you must pay 100% of the purchase price at the auction.
Can I buy a home at the auction and live in it?
Absolutely. This happens frequently regardless if you are a first time auction buyer or a seasoned investors. If you will need financing, one thing to keep in mind is that not all lenders are able to lend money on an owner occupied property.
What happens if I buy a home and someone is living in the home?
This is a common situation. In Washington State, the occupant must be given a 21 day written notice if the occupant is the previous home owner and 60 days if the occupant is a tenant. If the occupants refuse to head the written notice, you must file for an unlawful detainer (eviction) through the court system and complete the eviction proceedings. It is recommended that an attorney is used for this action. The occupants typically move out after they are served with an eviction notice. In rare cases, the occupants will be physically removed from the home by the Sheriff’s Department if they ignore the notice of eviction. In many cases, the new owner of the home offers the occupants cash to move out of the home. This process is called “cash for keys” and is perfectly legal as long as the occupants agree to it.
What happens if I buy a property and there is a lien against it?
This is also a very common situation. There are some liens that will become void after the property is auctioned, but past due property taxes, public utilities and some homeowner association liens must be paid. When you purchase a property at the auction, you receive these liens with it.
How do I find out what liens are against the property?
You may view the title documents available on our website on the property detail page. We display the public title information, but it may not include all of documents recorded on a particular property title. The best way is to contact a local title company and inquire if there are any liens against the property.
Can I get a professional home inspection?
Not usually. Unless you have permission from the home owner, you will not able to do a home inspection. This is generally the case.
What happens if I purchase a home at the auction and find out there is a problem with the foundation, of something worse?
There is no recourse for this type of scenario. Homes are purchased at the auction “as is”. You must research any home you intend to purchase to avoid this situation.
For up to date pre-foreclosure homes and properties please visit our auction page. Currently serving Thurston, Pierce, Lewis and Mason counties.
