WLCCI

Purchasing A Property At Public Auction

You may find that either the bank is unwilling to allow you to assume the mortgage or that you do not want to buy the property before the auction because of the large number of liens that exist. If you are satisfied, however, that you would like to own the property, you need to make plans to bid at the public sale.

There are several ways that can be used to determine when the public sale is going to be held.

• Contact the Sheriff’s Department and ask the secretary to the Sheriff to look at the court calendar.

• Contact the lender’s attorney and ask when the property will be sold at auction.

• Go to your local legal newspaper and check the ads to see when the property will be sold.

• Visit your courthouse to review a posted schedule of foreclosure sales.

Once you learn the sale date, contact the lender’s attorney to find out if the lender will accept any other terms than all cash. If the lender will not (and most will not), you will need to make arrangements to get the cash yourself.

Many properties have been sold on the courthouse steps for 50 or 60 cents on the dollar. If the property in which you are interested represents this kind of a bargain opportunity, generating the cash needed should not be difficult.

You could go to private lenders or partners who might advance the money needed, or if you have sufficient credit yourself, go to a local bank and get a 90-day loan. Once you buy the property and make any need repairs, you will be able to put a new mortgage on the property and take out whatever cash you had invested, or maybe even more than you invested.

Purchasing property at a public auction can be a very risky business. You have to know what you are doing. You not only need to be absolutely certain, through an engineering report (by a firm recommended by a broker or banker), that the property you are buying is in reasonably good condition or at least be familiar with its faults. Further, you need to have a good understanding of market value so that you are sure that you are getting a bargain.