Why It Is Difficult Closing Your Foreclosure Auction Dream Home
Have you ever wondered what it might feel like to find out or told that a foreclosure auction sales dream home you paid full price listed on MLS or at the public auction price list is not accepted or declined; can’t closing on the property after you’ve paid listing price to the trustee’s sales at the auction site? Even a nice home that you know very well in the neighborhood where you’ve lived for several years past, the trustee’s sale rejected your offer?
Buying a home is an every family dream in our society, but buying foreclosure auctions sale can be frustrated for the average first-time buyer even the veteran investors find it difficult sometimes closing on foreclosure auction property. The price posted on the foreclosure auction sale is not the total price value for that particular property on auction sale; it’s a just teaser price to draw a huge competitive bidden war among the interested party. Many hidden clauses are not revealing to the public; bidder or buyer agent must do due diligent to extract all or most problems the property carries with it.
Here are a few important things foreclosure auction sales that buyer didn’t know or published with the auction price list by trustee’s sale:
- A buyer didn’t have a chance to conduct a before-buy property checkup. “What you see is what you get”
- At the foreclosed auction sale, all sales are final and without remedy. There’s no warranty; where is, as –is agreements without any disclosures by the lender.
- The auction sale price purposely by an aggressive bidding process. The sale price of a property sole at a foreclosure auction sale is determined by an aggressive bidding development.
- There may be a possibility that the property’s title cannot be protected. Due to the unusual risk associated with the property bought at foreclosure sale; many insurers declined to issue a title insurance commitment.
- There is no convenience to use bargaining chip; most if not all auction sale is on a cash and carry basis; meaning a lot of cash which most new buyer may not have against a veteran investor.
- Proof of funds required prior to a bid action takes place; the trustee’s foreclosure sale required all the interested party to show the funds capability ahead of the auction sale.
Below are other findings on foreclosure auction sale by Denita:
Auctions are difficult in many cases.
They are listed in the MLS with a listing agent and office. It isn’t unusual to have auctions when the property is an REO type property. It is much more common when they are REO’s as opposed to “pre-foreclosures”. I only know my area of S Florida so it may be different in your area.
The listing does contain the auction information, but generally not all of the added fees IME. For example, it is increasingly common to have a mandatory ‘technology fee’ added to the purchase price paid by the buyer as well as the customary buyer’s premium (generally in the neighborhood of 5%). There are other fees too.
I have seen auction properties go under contract and then fail to close due to a seller’s issue, like not being able to deliver clear title because the seller didn’t own the property at the time of sale or closing! I explain to my buyers about the differences so they can be aware that it is a totally different process than any normal closing so they can prepare themselves mentally and financially. With an auction, you never know if it is going to close until it is actually closed. The seller can pull out at any time. The buyer? No, not without penal”]
[“If you believe in yourself and have dedication and pride – and never quit, you’ll be a winner. The price of victory is high but so are the rewards. Bear Bryant”]
A foreclosure auction sale is not for the average first time home buyer in term of the hidden clauses, condition of the property; the location, and the interior injected into to the auction sale as stipulated by the lender in the kit. The trustee’s sale price on an MLS or at the courthouse bulletin board is not an actual final price to rely on; the price will go up as more and more interested bidders increase prices that may make it impossible for the new home buyer out of reach. Even though the bidder won a price war at the trustee’s auction sale at the courthouse steps, it’s likely a buyer to face other hurdles that might hinder buyer chances closing on the foreclosure auction property. And also, it will cost four times more than the original price to get it insured if possible.
What do you think? Have you bought a trustee’s foreclosure auction sale in the past and how do you get so lucky getting the auction property of your dream home finalized? Please leave your comment below:
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