FORECLOSURE AUCTIONS
The basics

Getting Registered:

Registering for foreclosure auctions at the court house is quite simple. You typically need proof of identification and your 5% deposit in the event you place a winning bid (in the form of cash or certified check).


You could have won the auction bid on this 2 bedroom 2 bath we purchased for 40% less than market value.

Foreclosure AuctionNote:
In November of 2008 a Florida statute change now allows for the Clerk of Circuit Courts to conduct foreclosure-auctions and tax deed sales online. As of this writing, many counties are anticipating conducting their auctions in this manner. Commercial hosting companies are rallying for the business and I expect quite a few counties to go online with their auctions. This will definitely up the number of bidders due to the increased mobility of attending numerous auctions simultaneously. Each county has their choice of hosts for their auctions, so you will probably find numerous corporations hosting. I am hoping that Grant Street and Real Auction are the primary hosts selected due to their past performance with hosting the certificate auctions. Here is a link to the Duval county host page for their foreclosure sales. Foreclosure Auctions Online/Duval

Foreclosure Auctions Winning Strategy

Bidding is usually in $100.00 dollar increments. As a general rule we bid in odd amounts. For some strange reason it seems to throw off quite a few people. Previous bid of $42,700 our bid would be something like $44,855.27. Most people are thinking about their next bid and not really listening to the previous bid. By throwing someone off their game plan, even slightly, it can create an advantage for you. Many Clerks don't repeat the previous bid, so if you bid $42,800, after us, the Clerk will ignore your bid. I have seen people scream out 3 or 4 bids, one after another, without knowing that we had just bid the price up $1,200. I know this sounds ridiculous, but it works.

Foreclosure Auctions Note:
If there are properties which you are interested in but the foreclosure-auction price is too high, take note. If no bid is placed higher than the opening bid made by the representative, the title will be issued to the bank or lienor. There is opportunity there as well. I will discuss this further in future pages.

Foreclosure Auction, The Opening Bid

The opening bid at the foreclosure-auction will be that of the representing agent for the lienor or bank. In the rare event that no bank or lienor representative shows up, the opening bid could be $100.00 and bid up from there. We have attended 2 foreclosure auctions for HUD backed loans where no representative appeared and the winning bid was less than the amount foreclosed. In the event this does happen, the bank can object to the sale, there is a review process whereby a judge can decide if the winning bid represents a fair value for the property. If the judge deems the price is not fair the auction results may be stricken and the property reauctioned. This move is at the discretion of the judge and must be concluded during the 10 days following the auction.

It is for this reason that you should never begin rehab of a property until 10 days have passed. The 10 day period following the auction is commonly referred to as a period in which the property is redeemable but in fact the property auction is under review. During this window, the previous property owners can object to the sale which will result in a court hearing, the auction results can be ruled unjust and the winning bidder would receive reimbursement for monies paid at the auction. Very rarely does a judge set aside a foreclosure-auction result, but why risk it, just wait out the 10 days before commencing with work on the property.

Foreclosure Auction, Winning Bidder

If you are the winning bidder you are required to come forward and place your 5% deposit. You must return with the balance before closing of business that day or your deposit will be forfeited.

In most counties, acceptable payment must be in the form of cash or certified check. You are also required to pay document stamps and recording fees. Document stamps are based on the price paid for the property and usually equate to a few percent of the bid. The recording fee for the deed is usually a set amount.

The property will be conveyed to you by certificate of title. This document will be prepared by the Clerk of Courts, notarized, recorded and mailed to you. It usually takes about 2 weeks for you to receive it. A certificate of title is not a free and clear title. If there are no liens, loans or judgments against the property which are superior to the certificate of title, you can obtain title insurance. If there are superior encumbrances you will be required to satisfy them before you can obtain title insurance. A certificate of title also does not ensure there are no defects of title.

A break in the chain of title is the most common defect and is usually caused by an erroneous deed. An unrecorded assignment from one bank to another is not deemed a break in the chain of title but can likewise be annoying. Both of these scenarios, break in chain of title and unrecorded assignment, can typically be corrected but take time and patience.

• A chain of title is the sequence of historical transfers of title to a property. The "chain" runs from the present owner back to the original owner of the property.
• A defect of title is typicaly a break in the chain of ownership that might invalidate or cloud the title to a property.

• A defect of title may also be considered a cloud of title.
• A cloud of title is a shadow cast upon a title, by doubt of ownership, and is usually relinquished by quiet title action.
• A quiet title is used to determine true right and title of ownership in a property as determined by civil law.

Foreclosure Auction Note:
While rare, title defects and chain of title issues do occur. Of the foreclosure property we have purchased in the last 5 years we have obtained 2 that had such problems. There are frequently superior liens to be payed, but if you are aware of them before you bid that should not be of concern.

The information found here is my opinion and should not be interpreted or construed as legal or professional advice. No legal or professional advice is being given and the use of this information is at the readers own risk and peril. It is advised that those considering this investment should seek qualified legal and professional services.

Mortgage Foreclosure (on nav bar)
The portal page for Florida Mortgage Foreclosure Investors.

Foreclosure, What is
Foreclosure Types, What Is & Why Buy, Find Your Free Auction List.

Foreclosure Auction Basics
The Basics, Winning Strategy, Requirements

Foreclosure Liens
You had better know what is superior before you bid.

Foreclosure Lien Finding
Locate Liens and Mortgages using the case file.

ForeclosureInfo
What can be found where, creating a superiority checklist, chain of title tips, foreclosure file retrieval.

Foreclosure Buying
Buying foreclosures before the auction. The winning strategy for buying from the property owners. Short Sales Info.

Foreclosure Deals
How to contact the bank first, after they obtained title from a foreclosure sale. Be first and win.

Foreclosure Research Tips
D.I.Y. title search, title reports, info on how to conduct due diligence.

Foreclosure Profits
How to keep your profit and save big money with these tips.

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