Monday, October 20, 2014
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 SolanoScene@TJones-Law.com.

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

Girl Scouts explore sweet side of chemistry

By Jess Sullivan | From Page: A1, 1 Comment | Gallery

 
Senior Center hosts monthly travel presentation

By Daily Republic staff | From Page: A3

 
Total Home, Garden & Harvest Festival wraps up

By Daily Republic staff | From Page: A3, 1 Comment | Gallery

 
Pumpkin Patch Festival set for final weekend

By Daily Republic staff | From Page: A3

Sessions teach about child support process

By Daily Republic staff | From Page: A3

 
Arrivederci! Italian Festival

By Daily Republic staff | From Page: A3 | Gallery

Red Kettle Program returns for holidays

By Daily Republic staff | From Page: A3, 1 Comment

 
Holiday Fashion Extravaganza registration deadline looms

By Daily Republic staff | From Page: A3

Elder depression and substance abuse topic of discussion

By Daily Republic staff | From Page: A3

 
Vacaville library to host composting series

By Daily Republic staff | From Page: A3

Napa man jailed for running over ex-girlfriend

By Staff and wire reports | From Page: A4, 3 Comments

 
Local governments schedule meetings

By Daily Republic staff | From Page: A4, 1 Comment

Weather for Monday, Oct. 20, 2014

By Daily Republic staff | From Page: B12

 
.

US / World

Expelled Nazis paid millions in Social Security

By The Associated Press | From Page: A1, 1 Comment

 
Cruise ship docks with Ebola-watched health worker

By The Associated Press | From Page: A1

Friends, family of Ebola patient reach milestone

By The Associated Press | From Page: A1

 
Obama switches gears, confronting Ebola head on

By The Associated Press | From Page: A1, 4 Comments

CDC to revise Ebola protocol, Pentagon preps team

By The Associated Press | From Page: A1

 
California lottery sales top $5B for first time

By The Associated Press | From Page: A4

Archaeologists seek movie set in California sands

By The Associated Press | From Page: A4

 
The 10 semifinalists for World’s Funniest Person

By The Associated Press | From Page: A5, 2 Comments

On the road to find the world’s funniest person

By The Associated Press | From Page: A5

 
New England raking in millions from leaf peepers

By The Associated Press | From Page: A6

Police hunt for clues near where Va. remains found

By The Associated Press | From Page: A6

 
Super drunk woman arrested, mistook jail for bar

By The Associated Press | From Page: A6, 1 Comment

Robotic device helps paralyzed groom walk aisle

By The Associated Press | From Page: A6, 1 Comment

 
Coroner: 6 fire victims died of smoke inhalation

By The Associated Press | From Page: A6

Pope beatifies Paul VI at remarkable synod’s end

By The Associated Press | From Page: A7, 1 Comment

 
S. Korea: 2 Koreas exchange gunfire along border

By The Associated Press | From Page: A7

Sweden: 3 credible sightings in submarine search

By The Associated Press | From Page: A7

 
5 Things to Know about Pope Paul VI

By The Associated Press | From Page: A7

UN says Iraq has executed 60 people this year

By The Associated Press | From Page: A7

 
Marine accused in Philippine killing tests US ties

By The Associated Press | From Page: A9

.

Opinion

Is it truly affordable health care?

By Jim Mccully | From Page: A8, 22 Comments

 
Suisun mayor offers his endorsements

By Letter to the Editor | From Page: A8, 14 Comments

Which candidates support Alzheimer’s cure?

By Letter to the Editor | From Page: A8

 
Beware a Trojan horse

By Letter to the Editor | From Page: A8, 4 Comments

Pulse poll question

By Daily Republic | From Page: A8, 1 Comment

 
.

Living

Community Calendar: Oct. 20, 2014

By Susan Hiland | From Page: A2

 
Today in History: Oct. 20, 2014

By The Associated Press | From Page: A2

I’m too scared to leave my abusive husband of 15 years

By Kathy Mitchell and Marcy Sugar | From Page: B5

 
Horoscopes: Oct. 20, 2014

By Holiday Mathis | From Page: B5

 
Horoscopes: Oct. 21, 2014

By Holiday Mathis | From Page: B7

.

Entertainment

TVGrid Oct 20

By Daily Republic Syndicated Content | From Page: A10

 
TVGrid Oct 21

By Daily Republic Syndicated Content | From Page: A11

Comedians honor Jay Leno with humor prize in DC

By The Associated Press | From Page: A11

 
Report: Nashville songwriter Paul Craft dies at 76

By The Associated Press | From Page: A11

Reported ‘Easy Rider’ chopper sells at auction

By The Associated Press | From Page: A11

 
‘New Girl,’ ‘Cosmos’ win Environmental Media Award

By The Associated Press | From Page: A11

 
‘Fury’ blasts ‘Gone Girl’ from top of box office

By The Associated Press | From Page: A11

.

Sports

Manning breaks Favre’s TD mark in 42-17 win over 49ers

By The Associated Press | From Page: B1 | Gallery

 
Tim Lincecum waits his turn, still yet to pitch

By The Associated Press | From Page: B1 | Gallery

Keselowski keeps title hopes alive at Talladega

By The Associated Press | From Page: B1 | Gallery

 
Palmer leads Cardinals past Raiders 24-13

By The Associated Press | From Page: B1 | Gallery

38th Doug Butt Run highlights week’s events

By Paul Farmer | From Page: B1

 
Serena Williams hits back at Russian official

By The Associated Press | From Page: B2

Kings pick up G Ben McLemore’s option

By The Associated Press | From Page: B2

 
Rockets beat Warriors 90-83 in exhibition game

By The Associated Press | From Page: B2

Pacquiao makes professional basketball debut

By The Associated Press | From Page: B2

 
Cal receiver Trevor Davis released from hospital

By The Associated Press | From Page: B2

Sounders rally for 2-2 tie with LA Galaxy

By The Associated Press | From Page: B2

 
Rangers net 2 in 4 seconds; Lundqvist stops Sharks

By The Associated Press | From Page: B2 | Gallery

NFL roundup: Jaguars bounce Browns, gets first win

By The Associated Press | From Page: B2 | Gallery

 
SEC is 1st conference to put 4 in top 5 of AP poll

By The Associated Press | From Page: B2

Ski champ Svindal injured while playing soccer

By The Associated Press | From Page: B2

 
This date in sports history for Monday, Oct. 20, 2014

By The Associated Press | From Page: B3

 
Royals dependent on 3-headed bullpen monster

By The Associated Press | From Page: B8 | Gallery

Denkinger’s miss revisited as Series returns to KC

By The Associated Press | From Page: B9 | Gallery

 
Hend wins Hong Kong Open in a playoff

By The Associated Press | From Page: B9

Baek wins playoff to take LPGA South Korea

By The Associated Press | From Page: B9

 
Ilonen beats Stenson in World Match Play final

By The Associated Press | From Page: B9

Jay Haas wins Greater Hickory Kia Classic

By The Associated Press | From Page: B9

 
Ben Martin wins 1st PGA Tour title in Las Vegas

By The Associated Press | From Page: B9

.

Business

Facebook, Apple pay for egg freezing, sperm donors

By The Associated Press | From Page: A10

 
.

Obituaries

.

Comics

B.C. Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Peanuts Oct 20

By Daily Republic Syndicated Content | From Page: B4

Baby Blues Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Rose is Rose Oct 20

By Daily Republic Syndicated Content | From Page: B4

Dilbert Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Frank and Ernest Oct 20

By Daily Republic Syndicated Content | From Page: B4

Get Fuzzy Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Pickles Oct 20

By Daily Republic Syndicated Content | From Page: B4

Garfield October 20

By Daily Republic Syndicated Content | From Page: B4

 
Sally Forth Oct 20

By Daily Republic Syndicated Content | From Page: B4

Baldo Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Beetle Bailey Oct 20

By Daily Republic Syndicated Content | From Page: B4

Zits Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
Blondie Oct 20

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id Oct 20

By Daily Republic Syndicated Content | From Page: B4

 
For Better or Worse Oct 20

By Daily Republic Syndicated Content | From Page: B4

Bridge Oct 20

By Daily Republic Syndicated Content | From Page: B5

 
Cryptoquote Oct 20

By Daily Republic Syndicated Content | From Page: B5

Crossword Oct 20

By Daily Republic Syndicated Content | From Page: B5

 
Word Sleuth Oct 20

By Daily Republic Syndicated Content | From Page: B5

Sudoku Oct 20

By Daily Republic Syndicated Content | From Page: B5

 
Dilbert Oct 21

By Daily Republic Syndicated Content | From Page: B6

Beetle Bailey Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
B.C. Oct 21

By Daily Republic Syndicated Content | From Page: B6

Frank and Ernest Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Blondie Oct 21

By Daily Republic Syndicated Content | From Page: B6

Garfield Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Oct 21

By Daily Republic Syndicated Content | From Page: B6

Baldo Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Pickles Oct 21

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Baby Blues Oct 21

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth Oct 21

By Daily Republic Syndicated Content | From Page: B6

Zits Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Wizard of Id Oct 21

By Daily Republic Syndicated Content | From Page: B6

Peanuts Oct 21

By Daily Republic Syndicated Content | From Page: B6

 
Bridge Oct 21

By Daily Republic Syndicated Content | From Page: B7

Sudoku Oct 21

By Daily Republic Syndicated Content | From Page: B7

 
Crossword Oct 21

By Daily Republic Syndicated Content | From Page: B7

Word Sleuth Oct 21

By Daily Republic Syndicated Content | From Page: B7

 
Cryptoquote Oct 21

By Daily Republic Syndicated Content | From Page: B7