How do we buy properties at courthouse steps?

Question

Here in Missouri, as in other states, i suppose, the sell prpperties at the court house steps after they are listed in the newspaper for a certian amount of time. Is it safe to buy these and how do you find out if their are huge liens or other problems with them? As i understand it, someone could have a lien on the prperty but it could be filed somewhere else besides the courthouse where they are selling the property? Want to buy for investment but am reluctant to do so, any ideas or anyone bought these type of properties at the courthouse steps?

Answer 1

I own a foreclosure company and my advice to you, is that unless you have a clear understanding of EXACTLY what is being sold on the "courthouse steps", do not bid.

What is being sold is NOT always the first deed of trust or mortgage on the home. We often find buyers trying to bid on the foreclosure sale of a second or third deed of trust. So you might have a $10,000 second deed of trust being auctioned off, and the auction buyer "wins" the auction, but gets the home subject to a first mortgage or deed of trust of $200,000, with the obligation to make the payments on that mortgage. To add insult to injury he then has to evict the former owners and repair the home. (Don't forget that you don't get to inspect the home and usually can't finance the home.)

The ONLY way you can make money buying a foreclosed home is to 1) know exactly what the state of the title is - you can do that by purchasing a policy of preliminary title insurance (usually costs about $500 for each home you are interested in bidding on) 2) know exactly what the CURRENT market value of the property is. 3) know what the cost of any repairs will be and 4) have a good idea what the cost to hold the property and sell the property will be.

Last, but not least, if you can't resist the temptation to gamble, and can't afford to go to Las Vegas (where the odds are better), you need to take CASH or CASHIERS CHECKS to the auction, as no financing is allowed. (One person mentioned taking checks in the amount of $1,000 each - but neglected to mention that those need to be casiers checks.)

Answer 2

I know people that have bought Foreclosures and tax properties. Yes if you do your homework you can succeed. With tax sales you pay the taxes yet the owner has a period of time several years where if they want can just pay the back taxes and have the property back. In this case you will get your money you paid out back. If you do go long enough to own the property you will also inherit any defects that may be lurking on the title. Foreclosures usually the property is in really bad shape. Same as tax sales if I were to buy a title company told me to before trying to bid on any foreclosures or tax properties have the title checked. Cost a little but not nearly as running the title.

Answer 3

You will need to have the funds available immediately. They do not wait for loans. You bid at the time listed in the ad. When it is done, the owner still has so long to pay you off plus interest and get to keep their home. My wait time was 6 months. Watch out for mobile homes on property, sometimes the sale is just for the land.

Answer 4

As Cop350zx said "Most of the properties are in run down neighborhoods with run down houses on them. Good luck trying to flip a house where no one wants to live". Have you ever rebuilt a house? Can you do roofing, drywall, plumbing, etc.? If so, maybe you can make money if the neighborhood is improving. If not, fergetabout and watch a movie called "The Money Pit" instead.

Answer 5

People that frequent these auctions will sell the service of teaching you how to research the properties before you buy.

You must register as a bidder before the auction starts in most cases.

Most of the properties are in run down neighborhoods with run down houses on them. Good luck trying to flip a house where no one wants to live.

Answer 6

go to the courthouse and get a list and calander of auctions. Show up and bid. Bring bank checks in $1000 denominations, and pay right there. Thats it.

Answer 7

i purchased a house this way and you have to be savy enough to research the county records because if there is a lein it will appear immediately and the property cannot be sold unless it is disclosed.