Friday, March 27, 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

.

Solano News

Everyday life inspires model’s music

By Amy Maginnis-Honey | From Page: B1

 
Hosting gig for comic, birthday party on weekend schedule

By Amy Maginnis-Honey | From Page: B1

 
Brasher new president, CEO of Jelly Belly

By Ryan McCarthy | From Page: A1, 2 Comments | Gallery

Rio Vista singer ready for Rancho Cordova show

By Amy Maginnis-Honey | From Page: B1

 
 
 
Spring Fling set to return to Rancho Solano

By Susan Hiland | From Page: A3

 
Kids fishing day events return

By Susan Hiland | From Page: A3 | Gallery

 
Fairfield police log: March 25, 2015

By Susan Hiland | From Page: A12

 
Suisun police log: March 25, 2015

By Susan Hiland | From Page: A12

.

US / World

Co-pilot believed to have purposefully crashed plane

By The Associated Press | From Page: A1

 
Lawyers dispute hoax claim, boyfriend says he was drugged

By The Associated Press | From Page: A1

 
L.A. river revamp to cost double previous projections

By The Associated Press | From Page: A4

 
State to alter ban on where sex offenders can live

By The Associated Press | From Page: A5

Governor awaits $1B drought relief bill

By The Associated Press | From Page: A5

 
US drops graphic leaflet to possible Islamic State recruits

By The Associated Press | From Page: A5

AP Exclusive: Special ops troops using flawed intel software

By The Associated Press | From Page: A5

 
Talent agency wants Matt McConaughey speaking fee secret

By The Associated Press | From Page: A7

 
Grateful Oklahomans salvage belongings after killer storm

By The Associated Press | From Page: A7

Fact Check: Myths in the political roar over Common Core

By The Associated Press | From Page: A7

 
US: Chicago-area cousins planned US terrorist attack

By The Associated Press | From Page: A7

Report: Teen says mom killed her siblings found in freezer

By The Associated Press | From Page: A7

 
House OKs bipartisan Medicare doctor bill; fate up to Senate

By The Associated Press | From Page: A7

Tunisians assure Star Wars sets safe from Islamic State

By The Associated Press | From Page: A10

 
US Thunderbolt II attack planes on training in Poland

By The Associated Press | From Page: A10

Syrian government shells kill 18 in south, activists say

By The Associated Press | From Page: A10

 
Turmoil in Yemen escalates as Saudi Arabia bombs rebels

By The Associated Press | From Page: A10

Russian, American ready for a year in space

By The Associated Press | From Page: A10

 
.

Living

Today in History: March 27, 2015

By The Associated Press | From Page: A2

 
Community Calendar: March 27, 2015

By Susan Hiland | From Page: A2

Horoscopes: March 27, 2015

By Holiday Mathis | From Page: A9

 
Parents may be enabling son’s drinking and hurting his employment chances

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

Week in preview March 27 to April 3, 2015

By Amy Maginnis-Honey | From Page: B1

 
‘Downton Abbey’ to end after upcoming 6th season

By The Associated Press | From Page: B2

With ‘Downton Abbey’s coming demise, here are 5 past deaths

By The Associated Press | From Page: B2

 
Ken Burns unravels the mysteries of cancer in PBS film

By The Associated Press | From Page: B2

 
Review: Animated alien adventure ‘Home’ lands with a thud

By The Associated Press | From Page: B3 | Gallery

 
Entertainment Calendar: March 27, 2015

By Susan Hiland | From Page: B4

 
TVGrid

By Daily Republic | From Page: B6

 
.

Sports

Marleau, Niemi lead Sharks past Red Wings 6-4

By The Associated Press | From Page: B7 | Gallery

 
Warriors can match franchise record for wins at Memphis

By The Associated Press | From Page: B7

Prep swimming preview: City teams look to make big splash

By Paul Farmer | From Page: B7 | Gallery

 
Notre Dame races by Wichita State 81-70 for Elite Eight spot

By The Associated Press | From Page: B8

Kentucky overwhelms West Virginia 78-39 in NCAA Sweet 16

By The Associated Press | From Page: B8

 
San Diego city, county join forces on bid to keep NFL

By The Associated Press | From Page: B8

Labor, developers reach deal on proposed Inglewood stadium

By The Associated Press | From Page: B8

 
Italians will pull out of America’s Cup if boats downsized

By The Associated Press | From Page: B8

Fiancee of Aaron Hernandez to be called to testify Friday

By The Associated Press | From Page: B8

 
Stanford’s VanDerveer, Notre Dame’s McGraw to face off

By The Associated Press | From Page: B8

Former Germany coach Berti Vogts joins Klinsmann’s US staff

By The Associated Press | From Page: B8

 
Officials OK demolishing Irwindale Speedway for outlet mall

By The Associated Press | From Page: B8

Signups for Friday, March 27, 2015

By Paul Farmer | From Page: B8

 
Sharks sign 2 college players

By The Associated Press | From Page: B8

Top-seeded Wisconsin hangs to beat North Carolina 79-72

By The Associated Press | From Page: B8

 
49ers waive OL Jonathan Martin after 1 season with team

By The Associated Press | From Page: B8

This date in sports history for March 27, 2015

By The Associated Press | From Page: B9

 
Mirim Lee leads LPGA Tour’s Kia Classic

By The Associated Press | From Page: B10

 
Charley Hoffman takes PGA lead in wind-swept Texas Open

By The Associated Press | From Page: B10

.

Business

Range Rover offers an exclusivity that’s rich with irony

By The Washington Post | From Page: C1

 
Google’s new CFO gets $70M for defecting from Morgan Stanley

By The Associated Press | From Page: B11

Bankruptcy hearing could decide fate of RadioShack

By The Associated Press | From Page: B11

 
Microsoft wants US suppliers to give employees paid time off

By The Associated Press | From Page: B11

Lawmakers unhappy with new fracking rules

By The Associated Press | From Page: B11 | Gallery

 
Authorities go after crooked car deals in national crackdown

By The Associated Press | From Page: B11

Oil prices jump almost 5 percent as tensions mount in Yemen

By The Associated Press | From Page: B11

 
New Samsung, HTC phones coming April 10 in US

By The Associated Press | From Page: B11

.

Obituaries

.

Comics

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Baby Blues

By Daily Republic Syndicated Content | From Page: A8

 
Blondie

By Daily Republic Syndicated Content | From Page: A8

Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

 
Pickles

By Daily Republic Syndicated Content | From Page: A8

Dilbert

By Daily Republic Syndicated Content | From Page: A8

 
Baldo

By Daily Republic Syndicated Content | From Page: A8

B.C.

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Garfield

By Daily Republic Syndicated Content | From Page: A8

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Bridge

By Daily Republic Syndicated Content | From Page: A9

Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

 
Crossword

By Daily Republic Syndicated Content | From Page: A9

Cryptoquote

By Daily Republic Syndicated Content | From Page: A9