Tuesday, April 21, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Should I avoid auctions for investment properties?

By
From page C2 | February 02, 2013 |

Q: It’s no secret that many houses are going for a lot less than they were a few years ago, so I keep thinking it’s time to buy some investment properties. I have a friend who has bought a couple of properties at auctions. They didn’t have real estate agents and said everything was fine. On the other hand, I keep reading about people who are buying these houses and get themselves in trouble because the laws are very different when it comes to buying a foreclosure as opposed to buying a house the normal way. Should I stay away from the auctions? Should I contact an agent? How can I find out what to do?

A:  It depends on what you mean by “the normal way.”

Right now, short sales are the “normal way.” They account for a vast majority of the homes on the market.

Complicating this issue for you is the fact that there are relatively few homes currently on the market, or being foreclosed, and there is an armada or investors all competing to purchase them.

For a lone home buyer, the whole process can be extremely competitive.

But for your specific question, let’s start at the beginning.

You need to find out if you are even able to buy a rental property. Go to your local bank and sit down with a loan officer. You should be able to get an idea of whether you should go any further down this road.

Nowadays, investor loans typically require outstanding credit and a big down payment.

I’m being told that if you have good credit and 20 percent to put down on the property, the financing shouldn’t be a problem. But you want to make sure before you do anything else.

You then need to figure out what kind of “auction” you’re talking about. People often confuse the various types.

The most basic is the actual foreclosure auction.

When a house is being foreclosed by the bank, notices are published in the newspaper, and at a specific time and place the house is sold to the highest bidder. The buyer receives a deed from the sheriff.

In a foreclosure auction, the buyer receives nothing from the seller. There are no disclosures, no title report, no right to inspect, nothing. You pay your money and get a sheriff’s deed.

Right now, there are very few foreclosure auctions where anybody even shows up to bid. The reason is simple. The opening bid has to be at least as much as the first mortgage on the property. Since most of the foreclosed homes are upside down, meaning there is more owed than the house is worth, no one wants to make the minimum bid.

As a result, the bank simply takes title to the house.

Most people who say they bought a house at a foreclosure auction were really buying a house that was already foreclosed and is now owned by the bank itself.

Banks used to then hold auctions for the properties they were trying to dump.

These auctions may look, and even sound like foreclosure auctions but they are very different for several reasons.

However, I don’t hear of these bank auctions anymore. Maybe they still happen, but I suspect it must be infrequently.

If you want to buy a house, for investment purposes or to live in, find a Realtor.

You never limit yourself by using a Realtor. Plus, their commission comes out of the sale of the property, so you’re not incurring any added costs.

A Realtor can help you find both short sales and bank owned properties, so you get the whole market available to you.

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like to have answered in this column you can contact him at [email protected].

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

     
    Kids Day of Fishing began with $20 donation

    By Amy Maginnis-Honey | From Page: A2

     
    Chabad will begin Torah for Solano Jewish community

    By Amy Maginnis-Honey | From Page: A5

    Library foundation executive moves to Child Haven

    By Susan Winlow | From Page: A5

     
    Theater schedules free screening of Sundance film

    By Amy Maginnis-Honey | From Page: A8

    Vacaville plans recreation expo

    By Amy Maginnis-Honey | From Page: A5

     
    Frazier to discuss transportation at EDC breakfast

    By Kevin W. Green | From Page: A5

     
    Fairgrounds site of horse-betting seminar, brunch

    By Susan Hiland | From Page: A5

    Il Fiorello schedules vegetarian cuisine class

    By Susan Hiland | From Page: A5

     
    Fairfield police log: April 19, 2015

    By Glen Faison | From Page: A12

    Suisun City police log: April 19, 2015

    By Glen Faison | From Page: A12

     
    .

    US / World

    Lawmakers seek FDA review of ingredients used in cosmetics

    By The Associated Press | From Page: B2

     
     
     
    Sheriff’s domestic violence-related conviction erased

    By The Associated Press | From Page: B2

    Utah woman gets up to life in prison in deaths of 6 newborns

    By The Associated Press | From Page: B2

     
     
    Lawyer: Washington Post reporter in Iran faces 4 charges

    By The Associated Press | From Page: B2, 2 Comments | Gallery

     
    Bombs shatter houses in Yemen capital, hit near Iran Embassy

    By The Associated Press | From Page: B2

     
    Questions, answers about federal anti-radicalization effort

    By The Associated Press | From Page: B2

     
    Where US sees terror prevention, some Muslims see profiling

    By The Associated Press | From Page: B2, 4 Comments | Gallery

     
    Chemistry Ph.D. student illustrates her thesis in comic book

    By The Associated Press | From Page: B3 | Gallery

    Public memorial held for the Rev. Robert Schuller

    By The Associated Press | From Page: B2

     
    SC paper wins Pulitzer for reporting on domestic abuse

    By The Associated Press | From Page: B2

     
    .

    Opinion

     
    Why does Fed insist on targeting inflation?

    By Ramesh Ponnuru | From Page: A11, 2 Comments

    Income disparity study results ironic

    By Dan Walters | From Page: A11, 22 Comments

     
    .

    Living

    Community Calendar: April 21, 2015

    By Susan Hiland | From Page: A2

     
    .

    Entertainment

     
    Bobby Brown’s lawyer: Bobbi Kristina Brown has opened eyes

    By The Associated Press | From Page: B3

    US writer who fled Austria to escape Holocaust dead at 90

    By The Associated Press | From Page: B3

     
    Vice News, NPR, CNN, WNYC win double Peabody Awards

    By The Associated Press | From Page: B3

    HBO planning to deal Web pot sitcom ‘High Maintenance’

    By The Associated Press | From Page: B3

     
    Kolbert’s ‘Sixth Extinction’ wins Pulitzer for nonfiction

    By The Associated Press | From Page: B3

    Wolfe’s ‘Anthracite Fields’ wins Pulitzer for music

    By The Associated Press | From Page: B3

     
    Anthony Doerr wins Pulitzer Prize for fiction

    By The Associated Press | From Page: B3

    Elizabeth A. Fenn wins Pulitzer Prize for history

    By The Associated Press | From Page: B3

     
    Gregory Pardlo’s ‘Digest’ wins Pulitzer Prize for poetry

    By The Associated Press | From Page: B3

    David I. Kertzer wins Pulitzer for biography-autobiography

    By The Associated Press | From Page: B3

     
    Stephen Adly Guirgis wins Pulitzer for drama

    By The Associated Press | From Page: B3

    .

    Sports

    Mustangs rally in seventh inning to top Falcons

    By Daily Republic staff | From Page:

     
    AP source: Peterson stays home from Vikings workouts

    By The Associated Press | From Page: B1

    Report: 2 teams needed to make California stadium profitable

    By The Associated Press | From Page: B1

     
    Data deluge: MLB rolls out Statcast analytics on Tuesday

    By The Associated Press | From Page: B1

    Former Chicago Bears linebacker Doug Buffone dead at 70

    By The Associated Press | From Page: B1

     
    New format means injured drivers no longer must race

    By The Associated Press | From Page: B1

    Saunders: ‘I’m the coach until I say I’m not’

    By The Associated Press | From Page: B1

     
    Faldo to make final appearance at British Open this year

    By The Associated Press | From Page: B1

    Braves’ McKirahan suspended 80 games for positive drug test

    By The Associated Press | From Page: B1

     
    Raptors Lou Williams wins NBA Sixth Man Award

    By The Associated Press | From Page: B1

    Ugly Olympic conflict breaks into open at Sochi conference

    By The Associated Press | From Page: B1

     
    Pacquiao gets in 2 words before conference call cancelled

    By The Associated Press | From Page: B1

    Eagles sign quarterback Tim Tebow to 1-year contract

    By The Associated Press | From Page: B1

     
    McLellan out after 7 years as coach of San Jose Sharks

    By The Associated Press | From Page: B1

    Pelicans coach says Warriors arena noise might be too loud

    By The Associated Press | From Page: B1

     
    Police: LA Kings’ Jarret Stoll had cocaine, Ecstasy in Vegas

    By The Associated Press | From Page: B1

    Desisa wins 119th Boston Marathon; Rotich takes women’s race

    By The Associated Press | From Page: B1

     
    Jockey Chris Antley leads Racing Hall of Fame class

    By The Associated Press | From Page: B1 | Gallery

    .

    Business

    Judge returns ultra-rich club founder Tim Blixseth to jail

    By The Associated Press | From Page: B4

     
    Running out of time: Limited-time deals can be limiting

    By The Associated Press | From Page: B4

    $134M proposed for 10 BP-funded oil spill recovery projects

    By The Associated Press | From Page: B4

     
    Hormel says bird flu outbreak will hurt turkey sales

    By The Associated Press | From Page: B4

    Bird flu confirmed at Iowa farm with 5.3 million chickens

    By The Associated Press | From Page: B4

     
    US stocks gain, rebounding from Friday’s slump; Hasbro jumps

    By The Associated Press | From Page: B4

     
    Survey: US businesses expect sales rebound, more hiring

    By The Associated Press | From Page: B4

    Bristol-Myers: 2 cancer drugs beat 1 against melanoma

    By The Associated Press | From Page: B4

     
    Halliburton says has cut 9,000 jobs in wake of oil’s drop

    By T. Burt McNaughton | From Page: B4

    Labor group seeks rehiring of workers at 5 Wal-Mart sites

    By The Associated Press | From Page: B4

     
    Frederick’s of Hollywood files for Chapter 11 bankruptcy

    By The Associated Press | From Page: B4

    Willie Nelson becomes latest celebrity in marijuana business

    By The Associated Press | From Page: B4 | Gallery

     
    Kraft Mac & Cheese shedding the dyes

    By The Associated Press | From Page: B4

    ESPN says Verizon’s new FiOS TV packages violate agreements

    By The Associated Press | From Page: B4

     
    Lawsuit: Southwest failed to respond to medical emergency

    By The Associated Press | From Page: B4

    .

    Obituaries

    .

    Comics

    Bridge April 21

    By Daily Republic Syndicated Content | From Page: B8

     
    Get Fuzzy April 21

    By Daily Republic Syndicated Content | From Page: B7

    Peanuts April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Rose is Rose April 21

    By Daily Republic Syndicated Content | From Page: B7

    Frank and Ernest April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Baby Blues April 21

    By Daily Republic Syndicated Content | From Page: B7

    For Better or Worse April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Word Sleuth April 21

    By Daily Republic Syndicated Content | From Page: B8

    Dilbert April 21

    By Daily Republic Syndicated Content | From Page: B7, 1 Comment

     
    Sally Forth April 21

    By Daily Republic Syndicated Content | From Page: B7

    Cryptoquote April 21

    By Daily Republic Syndicated Content | From Page: B8

     
    Garfield April 21

    By Daily Republic Syndicated Content | From Page: B7

    Crossword April 21

    By Daily Republic Syndicated Content | From Page: B8

     
    B.C. April 21

    By Daily Republic Syndicated Content | From Page: B7

    Wizard of Id April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Blondie April 21

    By Daily Republic Syndicated Content | From Page: B7

    Beetle Bailey April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Baldo April 21

    By Daily Republic Syndicated Content | From Page: B7

    Zits April 21

    By Daily Republic Syndicated Content | From Page: B7

     
    Pickles April 21

    By Daily Republic Syndicated Content | From Page: B7

    Sudoku April 21

    By Daily Republic Syndicated Content | From Page: B8