Also the first lien holder is foreclosing. The first lien is 320K. with second and third the total is in excess of 500k.

i would take 10% of the maximum that you are willing to spend on the house with you to the auction. so if the $440,000k offer that your realtor was initially making for you is the absolute maximum that you would like to spend on the property, then i'd be sure to take 44,000 with you. it would stink to be just a few thousand short on cash at the time of auction.

jiggreen

The success of buying low at an auction really depends on the amount of bidders and their interest in the property. I tried buying land at a US Treasury dept seizure auction and was outbid on all of the properties I bid on. And when I say outbid, I mean way over what I was willing to spend. I would say all the lots that sold, sold at 90% or more of its FMV. I don't remember what the payment terms were, but I think it pretty much favored a cash buyer. I know we had to fill out a bunch of forms to get a bidders number.

Good luck, its certainly worth a try, but I would make sure you have the financing in place to back up your offer.

90% FMV on a house appraised at 420K(bank has it appraised low) would be around 380k. Iam willing to spend that. In a slow real estate market I don't think anybody would go higher than that( at least I wouldn't if I am trying to make any money out of it).
Main question is "Is 30 days enough to close the loan". Also the would the bank do a loan on this type of a purchase?

I would recommend a mortgage broker over a bank simply becuase they have many more options and can get things done quickly. On the house I just sold, the buyer closed in 18 days with a first and second mortgage, so it can be done.

The biggest risk you have is that something unexpected like termites, mold or water damage delays the closing. What are your options if a delay occurs? Probably not good since I doubt the auction house will take a deal subject to financing. I personally wouldn't do it since I hear horror stories from my wife all the time about buyers and sellers running into issues during the close. At least I wouldn't do it if I did not have back up financing. You should ask the auctioneer since you wouldn't be the first person to want to do this.

What area of the country are you in? It's very common in our area to close in 2 weeks, yet I've heard in NYC it takes 90 days!! Ask a realtor in your area what the average time to close is in your area.

Average time to close is about 30 days, but it does depend on several variables. I would consult a mortgage broker to get an estimate. Good Luck, I hope you get the house.....

Do your financing research now. Find a few lenders that you might want to deal with and discuss this type of transaction with them. Ask them how long it takes them to close a loan these days, and then get Pre-approved. Not pre-qualified, but a full blown pre-approval.

Then you can make a bid with financing in hand.

if you were prepared to pay $440k earlier, wouldn't you be ready to pay that again? Sure, you might get a chance to get it cheaper, but if you liked the house, wouldn't you be ready to go that high again?

if you were prepared to pay $440k earlier, wouldn't you be ready to pay that again? Sure, you might get a chance to get it cheaper, but if you liked the house, wouldn't you be ready to go that high again?

Not if I don't have to!!!

Here's a question...if the OP signed an agreement with her buyer's broker, will she have to pay the commission since she will be "purchasing a house shown by the broker"? Just wondering.

Kabir:

The questions you are asking tell me you are not going to do well in a Sheriff's auction sale.

Get a Real Estate attorney in your jurisdiction and work with her/him so that you have all the details necessary in place before you show up at the auction.

Here in Milwauakee, Wisconsin, when any property goes on the Sheriff's auction block, there is NO MINIMUM starting bid. If the lein holders want a minimum amount, they have to bid along with everyone else.

Some of the buyers hereabouts take cash with them to Sheriff's auctions, but most take certified bank checks premade out to the Sheriff's department. All of the few that I know are preapproved or cash rich.

Using certified bank checks, you can't lose the money by accident or being mugged.

If you insist on taking cash, let me know what time you will be there and meet me in the alley out back.

Ruudman

Ruudman,
By cash I meant cashiers check etc!! Also in our county the min bid is 2/3rd of the appraised value. Ofcourse the bank will bid on the property till their investment in it is reached. I am getting preapproved and also have hired an attorney. Unless someone wants that house more than I do, I think I stand a good chance.

Kabir, be sure to let us know how it goes. With the outrageous prices of realestate today, many of us are looking into alternate means of purchasing a house. It would be great to get feedback from a first time buyer of Sherif sale property.