Temecula Real Estate...Online Foreclosure Auctions

The real estate market is rough everywhere...even for foreclosures and bank owned homes. In fact many bank owned properties are sitting for months. The reason they're sitting is simple. Either the bank or the listing agent has priced the home too high. SOUND FAMILIAR? well it should, owners aren't the only ones who can over price a home. The banks are more motivated to sell than owners though and if the home continues to sit at least the bank understands why and takes action. One route for many banks is online auctions.

Online real estate auctions are nothing new but these days many of them have a new twist. NO LISTING AGENT AND A HIGH BUYERS AGENT COMMISSION. The buyers agent can be referred by the Online Auction if you don't already have an agent or they can be your own agent. If you find a home listed in the MLS it could easily be an online auction. If you have your own agent he or she will simply need to register, which is only a confirmation that their license is current and they are with a broker. Once confirmation of these facts is completed (usually takes a few hours) you can then bid. Your bid reflects the price you're wiling to pay before any closing costs. For example, if a home is $400,000. and you've decided to bid that amount but need closings costs as well your agent will bid the $400,000 and once you win you'll add additional costs to the price you won the auction.

Once the auction has ended the bank wants an offer in writing reflecting the price, closing costs and terms. If you won the auction for less than the asking price the bank doesn't have to accept your offer so be prepared for a refusal if you won at a low price.

The auction I recently won for a client had been listed with another agent for 90 days at a price of about $60,000 more than the auction price. At the new low price the home was at the very bottom of the appraisal price so there was definitely room to ask for closing costs on top of the bank price. A very good candidate for my buyers. We won the auction and are just waiting for the process to be completed.

The bank is very specific as to what they'll pay as far as their own closing costs. They will pay their own escrow fees and Title for the buyer but other fees the seller usually pays ,they won't. These fees include Transfer Tax and Natural Hazards Report, both common seller fees in California. These fees are relatively low. As far as what the buyer can ask for in closing costs paid, the bank doesn't care as long as the home will appraise for the higher price and the lender will allow the costs to be paid. So if the buyer needs all their closing costs paid it's not a problem.

The bank owned home is sold as is meaning no repairs of any kind. The buyer can do a home inspection and should, but the bank won't fix anything.

The only contingency the seller will accept is a loan contingency for the normal period in California of 17 days. One thing to remember the contingency is not removed until it's removed in writing despite the period of time that's passed.

We haven't received a bank addendum yet with the normal closing penalties and because there is not listing agent the buyers agent is expected to complete all needed paperwork. The higher commission is their compensation. So really you can consider the bank owned home as a FSBO with the agent receiving single party compensation and the seller representing himself but depending on the agent to complete all the necessary paperwork.