My brother sent me this article today…
With such a slow December, I was wondering if foreclosure activity in my area was waning, but it appears that it was just piling up instead. Nearly 1000 foreclosures in one month in my county (a suburb of Atlanta)!
While I’ve yet to attend a foreclosure auction on the county courthouse steps (the MLS has served us well in finding properties), I think I’ll make a trip up there on February 3 for this one. And while I don’t expect that I’ll place any bids (though who knows, maybe I’ll do some serious research before then), it will be nice to get an idea of the properties likely to come on the market in the weeks following the auction.
It may be a slow rest of January, but February and March are lining up to be plenty busy evaluating deals and (hopefully) acquiring plenty more properties…
Auction should be fun. “Every hand that goes, every call that comes in… SOLD 57 SOLD 29!”
I can’t find a clip of the original, so this parody will have to do:
http://ca.youtube.com/watch?v=1ktrr6zaiPg
I think we’re the only ones in the world who actually remember this!!!
When one buys from a bank they’re able to purchase title insurance. Buying at auction requires not only having cash, but also having done your due diligence on the title work and condition of the property.
As to the title, one is essentially insuring their own title – a dangerous game if there ever was one.
Mark –
Certainly there is more due diligence involved when purchasing from auction, but if you’re diligent and careful, there’s no reason why you can’t mitigate the most serious of risks.
I agree somewhat and that’s where I buy my properties although I’ve seen great deals from the MLS.
As you know, a title company spreads their risk over thousands of properties where we may have just a few. If we miss a lien or the clerk misindexed for instance something the risk is not spread out and we take a serious hit.
My point is simply to warn of the dangers to others. Someone like J Scott may head in this direction, analyze it very carefuly and find some great deals, but others may not do all their homework and get burned.
We’ve seen new guys come out to the sale and bid on foreclosure sales on a second mortgages thinking it was the first or buying a property that has multiple code enforcement liens, etc.
I’ve been buying foreclosures for awhile but I’m going to get MLS access. There have been some fantastic deals I’ve seen lately in the MLS that rival the deals we’ve seen at the foreclosure sales with much less risk.
The problem with the foreclosure sales is that one never knows what is going to get cancelled or sold. In other words, it’s a lot of work. I have to make a list every night of the properties coming up for sale, do title work, rush out to see them in the morning, then attend the sale. Then when I buy, I may have termites behind the drywall, mold, a cracked slab…
Mark –
It’s an excellent, excellent point, and I did gloss over it way too quickly…
For all you up-and-coming investors out there who are considering jumping into foreclosure auctions, please re-read Mark’s comment a couple times…it’s VERY important…