What to Expect At a Foreclosure Auction

Whether you are an investor that would like to get into buying foreclosed homes for your personal use! Call me today! Laura Key 310.866.8422

Whether you are an investor that would like to get into buying foreclosed homes for your personal use or to flip the property or if you are having your home foreclosed on, you should know what to expect at a foreclosure auction. Of course, the actual steps that will be taken can vary a bit from state to state and from house to house, but it’s good to know what you will be getting into when you go to a foreclosure auction. Foreclosure auctions can be exciting, even fun, but knowing what to expect will help you make the most of the experience, whether you are an investor or a homeowner that is trying to get your house back.

Before the Auction

You’ll likely find out about the foreclosure auction in a local newspaper and on the flier may be information to pre-qualify for bidding. This will allow you to put down a deposit so that the auctioneer knows that you are a serious bidder and can fulfill your bid if you are the winning bidder. Being pre-qualified just sort of speeds up the process so that you don’t have to mess around with the deposit on the day of the auction. During this time you should also do some research on the house by looking into any liens that may be against the property, how much the property is worth, how much it has appreciated in the last few years, as well as property values in the area. If the home looks as though it will need some repairs, you should consider this as well when trying to come up with how much you will be willing to pay for the house. Without this research, no amount of knowledge about what goes on at a foreclosure option will help you because you won’t know where to start when it comes to actually making a good bid.

What Happens At the Auction

The auction will typically start with the auctioneer reading legal notices as well as a legal description of the property. The auctioneer will usually then begin taking bids on the property. If the auctioneer has pre-qualified bidders the process is more streamlined, if not, each time a bid is made the auctioneer will then ask for the bidders deposit check, which is typically right around $5,000 for residential auctions. After each bid the auctioneer will attempt to solicit bids for higher amounts. Each auction is different, but the auction increments usually are set by the auctioneer and may be by $100, $500, or $1,000 per bid. The auctioneer will continue to solicit bids by this increment until it is clear that the highest bid has been reached. Then, the auctioneer will announce, “Going once, going twice, three times, sold!” indicating that the auction is over and the property has been sold to the highest bidder.

Once the bidding has ended a foreclosure deed and purchase papers will be drawn up and validated by the new owner or purchaser and the mortgage holder. A grace will likely be given to allow the purchaser to find financing or to come up with the funds to cover the full amount of the bid. This grace period is usually 30 days unless the purchaser and the mortgage holder agree to other terms. After the grace period a closing will take place, so that the new owner can formally take the title to the property.

What Happens, Now?

The purchaser can do what he or she intended to do with the property, whether it is to move into the home or to sell it for full market value. The money paid by the purchaser will be distributed in order of priority, first of which would be taxes. After taxes money will be paid to the mortgage, then the second and third mortgage if applicable. If there is still money after paying these debts, remaining money will be paid to lien holders and creditors. There is a very slim chance that there will be money left over after all of the debts are paid, if this is the case then the monies will be paid to the former home owner.

What about the Original Owner?

The original owner will often be at the auction so that they can bid on their home, and this is legal as long as they have the deposit required. If the owner of the home that has been foreclosed does bid on the home they must remember that the deposit is not refundable and the deposit assumes that they will be able to finance the home within the grace period. Owners must also remember that if they buy the property back old debts may merge and become reinstated such as second and third mortgages that became void when the first mortgage foreclosed on the property unless one has filed bankruptcy and is truly free and clear of these debts. Owners will often drum up the funds to make the deposit so that they can have another 30 days to try to save their home. Owners may or may not be successful in their attempts to save their home at a foreclosure auction.

As you can see, there are a lot of things that go into a foreclosure auction, but none of them are all that difficult to understand, but knowing about them makes the auction more enjoyable. The auction itself is not all that complicated, but it can be very fast paced. At some foreclosure auctions there are a lot of people, at others there are only a few because of the location or just the debts attached to the property, or even the state of the property. If you are serious about the property you should pay close attention when bidding starts so that you are sure that you can get your bid in when you feel it’s time so that you have the best chance of being the top bidder.

 Call me for more info! Laura Key 310.866.8422

Allen Iverson Loses Atlanta Mansion in Foreclosure Auction, According to Report

Just one week after declining an invitation to join the Dallas Mavericks' D-League affiliate as he continues his thus-far unsuccessful pursuit of a return to the NBA and days after a family court judge lambasted his parenting during divorce proceedings, former All-NBA guard Allen Iverson has now reportedly lost his Atlanta mansion to foreclosure. The grim news comes, as it so often does, from TMZ:

Iverson allegedly defaulted on a $1.2 million mortgage which sent the $4.5 million home into foreclosure. He briefly fought off an auction ... but ultimately, he couldn't stop it.

Sources close to the sale tell TMZ ... Iverson's bank purchased the mansion [Tuesday] for $2.5 million.

This isn't the first time a mansion owned by Iverson has gone into foreclosure. Back in March 2011, the six-bedroom, nine-bathroom, 6,848-square-foot mansion he'd purchased in Cherry Hills, Colo., while a member of the Denver Nuggets "slip[ped] into foreclosure" after Iverson quit paying a mortgage on which he still reportedly owed $2,572,914. Iverson also met with some strife when parting with the six-bedroom mansion in Villanova, Pa., he'd owned while a member of the Philadelphia 76ers; it sat on the market for three years after he listed it at $6.3 million before eventually selling for just $2.6 million in 2010.

Iverson's personal finances have long been a matter of inquiry — since his last NBA stint with the 76ers ended in February 2010, there have been reports that, despite earning more than $154 million in salary over the course of his 14-year NBA career, plus plenty more in endorsements, the 2000-01 NBA Most Valuable Player is broke.

Those reports picked up steam last January, when a Georgia judge garnished Iverson's wages to settle a reported six-figure jewelry bill, leading to fast-money/publicity-grab offers for the former 76ers, Nuggets, Detroit Pistons and Memphis Grizzlies guard to play basketball in Puerto Rico and indoor soccer in Rochester, N.Y. They waned shortly thereafter, thanks to the revelation that Iverson actually has tens of millions stashed away in a trust, the lion's share of which he can't access until age 55 (Iverson turns 38 in June), and that he receives a $1 million annual stipend with which he can do as he pleases.

This latest round of reports, however, indicates that in spite of the funds he has available and in reserve, Iverson wasn't able to stay above water with the bank. His continued real-estate-centric turmoil, however, pales in comparison to the strife detailed in the final decree of a messy, long-term divorce between Iverson and his ex-wife Tawanna, which resulted in Iverson reportedly agreeing to a$3 million settlement late last month. The details on the decree:

TMZ.com reported that the [Atlanta family court] judge, who was not named by the website, blasted Iverson, who was married to Tawanna for 11 years. The couple have five children together.

The website, citing the couple's final divorce [decree], reported that the judge wrote, "[Iverson] does not know how to manage the children; has little interest in learning to manage the children and has actually, at times, been a hindrance to their spiritual and emotional growth and development.

"For example, he has refused to attend to an obvious and serious alcohol problem, which has caused him to do inappropriate things in the presence of the children while impaired.

"He has left the children alone without supervision. He has left his young daughters in a hotel room with men who are unknown to the mother."

According to TMZ, the judge ordered Allen Iverson to see a psychiatrist, and to attend Alcoholics Anonymous meetings for a year.

The website also reported that the judge awarded Tawanna custody of the children and that Allen can visit them under certain conditions.

Among them, according to the report, is that he can't drink alcohol within 24 hours of visiting.

All of this, obviously, is awful. As much as I once wanted to see Iverson return to the league on the off chance that he could, just for a moment, showcase the same singular spark of brilliance that made him so endlessly watchable and inspiring on the court during his time at Georgetown, in Philly and (to a lesser extent) in Denver, I've come to accept that his on-court life, at this stage, is likely over; now I only hope he can find some stability and balance in his off-court life. Continually reading and writing about his unsuccessful attempts thus far just hurts my heart.

Source: Yahoo Sports - By Dan Devine | Ball Don't Lie

Call Laura Key with all your foreclosure and short sale questions! 310.866.8422 www.KeyCaliforniaHomes.com