Tuesday, November 13, 2018

Foreclosure FAQ's

Frequently Asked Questions Regarding Buying at Foreclosure Auctions

 
Who do I make the deposit check payable to? 

Yourself, if you are the high bidder you sign it over. If you are not the high bidder you just put it back in the bank.


Will I be responsible for anything in addition to what I bid?

Yes. At a foreclosure auction the high bidder is typically responsible for any liens having a priority over the mortgage being foreclosed. Most often this is just real estate taxes and water & sewer charges owed to the particular municipality where the property is located. We almost always have a Municipal Lien Certificate from the City or Town outlining what is due. This question, however, should be asked at every auction.


What if I can’t get financing? 

You lose your deposit. Unless you are a cash buyer you should be either pre-qualified for a loan or be very confident in your ability to obtain a loan. 


Will we get to see the inside of the property? 

Usually not. The bank does not have keys to their borrower’s property and does not have the right to go in if the property is occupied. The auction typically takes place in the front yard and the property is sold sight unseen. 


What if the property is in bad shape inside or it needs a new heating system? 

You are buying the property “as is and where is” and subject to all known and unknown defects. There are no guarantees and no inspection contingencies. 


What if the property is occupied and the people won’t leave? 

It is the high bidder’s responsibility to evict the occupants if necessary.


What if my bank can’t close within the thirty days that was called for in the Memorandum of Sale? 

Every situation is different and you should ask the question of the attorney handling the foreclosure for the lender.