BUYING AT FORECLOSURE AUCTION vs. a FORECLOSURE LISTING....AUCTION WON OUT FOR THIS COUPLE!

Are Buyers looking twice at purchasing a "Bank Owned" property listed by an REO Broker vs. Bidding at the Courthouse steps?  There are risks when purchasing at a Foreclosure Auction however the rewards can be great.

This week I offered a property at Public Auction in front of the Annapolis, Maryland Courthouse. This property was up for Foreclosure. On behalf of the Lender, a bid was entered for $214,000. The bidding was somewhat aggressive and reached $227,000 before everyone dropped out except for a young couple and their Real Estate Agent. "228!" was called out by the young man standing nervously next to his wife. I quickly checked his deposit, gave the final call and cried "SOLD"!

They hugged, both dialed their cell phones to call parents, the agent was relieved, (said she wanted to write a book on how difficult this deal was).

Come to find out, the couple had a contract on the property. They went to settlement twice and the owner did not show up. Apparently there was a second mortgage taken out on the property and the Seller would have had to bring money to the table to satisfy the mortgages. A REPRESENTATIVE FOR THE SECOND MORTGAGE NEVER SHOWED UP TO THE AUCTION! SSoooo, this of course wiped out the second mortgage as long as there are no problems (such as, the Lender was never notified)

The couple had a contract on the house for $275,000. Although there were Bats and Termites that were never disclosed, the couple thought this was well worth the discount!

The agent asked several questions, "When do we get the keys"?  "Can we secure the premises"?, etc. I quickly educated her on the process and moved on to the next County.

There are deals to be had....if you are patient to find the best property for you..........are financially able......and are willing to accept the risks involved in purchasing a Foreclosed Property at Auction vs. a formally listed property with an REO Broker. (of which I list as well!). Do your homework and ask for advice!