| What is a foreclosure auction?|
|A foreclosure auction is a legal process by which a mortgagee
bank or private lender follows a legal procedure to sell real estate that has been pledged as collateral to secure a loan. The auction must be conducted by a licensed auctioneer. AMG conducts its auctions in a verbal form where buyers signal their bid (bidder cards are used) or call out their bids.|
| What types of auctions are there?|
|Absolute:||Property sells to the highest bidder regardless of price.|
|Reserve:||Property sells subject to a pre-established minimum bid set by mortgagee/owner.|
|Confirmation:||Property sells to the highest bidder subject to confirmation of the mortgagee/owner.|
|Sealed Bid:||Bids are submitted in sealed envelopes.
Sometimes, bidders who have reached the seller's minimum sale price participate in an oral, absolute auction.|
| What is the auction company's role in the foreclosure auction process?|
|The auction company is an agent for the mortgagee. It markets and auctions the property. Marketing includes supplying all pertinent information authorized for release readily over the phone or in writing to all interested parties. Auctioning is the actual call of the auction sale at the site on the auction date. |
| How can I find out what the
"Mortgagee's specific sale priced" is?|
| Not easily. That price
is kept confidential by the mortgagee in hopes that the auction process will
result in a successful third party sale that satisfies the indebtedness. To
determine a "ball park" idea of where the number may be, you would
need to consider the fair market value of the property. Often, the
mortgagee's bid price will be no more than roughly 70%-80% of the property's
appraised value, sometimes more. In certain situations the mortgagee
will not bid at all!
| Where will the auction sale take place?|
| The auction sale will take place on the premises of the actual property and will be identified by a red
auctioneer's flag. Occasionally an auction is conducted inside the
| When and how do I register to bid?|
| At the auction site you will be asked to give your name, address, phone number and to present your cash or certified check to AMG's representative for verification that you meet the required terms of the sale.|
| In addition to the selling price, what else may a successful bidder be responsible for?|
|A successful bidder is responsible for any "senior" attachments or municipal liens on the property, including unpaid real estate taxes, sewer, water, electric and other municipal liens. All of this information is public record. It is also the responsibility of the successful bidder to have a premises vacated if it is still occupied at the time of closing. |
| How long does the foreclosure process take? |
| From the point the
auction company is contacted by a client or its attorney to conduct an
auction, it takes approximately six weeks to complete the process. The
auction company gathers the appropriate information, advertises the auction,
markets the property and finally conducts the auction sale. From the date of
sale, a successful bidder has approximately 21-45 days to complete the
transaction. The closing date is specified in the "Terms of
| Who qualifies as a registered bidder?|
|In order to register for an auction, a potential buyer must furnish the required deposit as determined by the bank. Generally, the deposit must be a certified check, bank check or cash. If using a certified or bank check, it should be made payable to yourself, the bidder. The deposit will be taken from the successful bidder as a down payment by the
mortgagee's attorney. |
| What should I do to fully prepare myself to bid at a real estate foreclosure auction sale?|
- Get pre-approved from your bank:
It is up to the registered bidder to obtain financing. The auction company strongly suggests you establish your financing prior to the auction date. If the high bidder is not able to obtain financing by the predetermined closing date, the deposit will be forfeited.
- Perform "Due Diligence":
The mortgagee and auction company make no representations or warranties as
to the accuracy of information provided and it is strongly suggested that
the interested parties do what is known as "due diligence'
- Perform as close a visual inspection as possible. We do not recommend trespassing.
- Visit the appropriate Registry of Deeds. By using the book and page # from the
"mortgagee's sale of real estate" notice you can thoroughly research the mortgage being foreclosed.
- Visit the appropriate municipal departments and research any
outstanding municipal liens. Municipal liens may include property taxes,
water, sewer, utilities. If there are any outstanding municipal
liens on the properly, they are the responsibility of the successful bidder.
Municipal liens are found on public record with the municipal
departments and tax collector. Copies of Municipal Lien Certificates, when
available, are often shared with prospective buyers prior to or at the sale.
- Work with local real estate brokers on comparable sales to determine a fair market value on the property.
| Is it possible for a potential bidder to inspect a property prior to the auction? |
| On occasion the mortgagee will take possession of the property prior to the sale and an "Open House" or pre-auction preview will be set up. If the mortgagee has not taken possession and the debtor does not agree to grant access, there will be no preview of the property prior to the sale. The property is considered private property and no one has a right to enter the premises without the owner/tenant's permission.|
| How can I purchase a piece of property before the auction sale? |
| Legally, the property is owned by the debtor up until the moment of foreclosure, and he or she only would have the right to sell the property prior to the foreclosure auction sale.|
| What will the property sell for? |
|This question can only be answered after the sale. At a public auction the registered bidders determine what the property will sell for and it should be noted that the mortgagee may also be a registered bidder. The mortgagee may have a specific sale price that it wants for the property. If the registered bidders at the sale do not approach or exceed the
mortgagee's predetermined bid price, the mortgagee may bid and purchase the property. When property is bought by the mortgagee it is sometimes listed with a traditional real estate broker some time after the auction. |
| Would you advise an interested party to wait until after the foreclosure sale to try and purchase the property?|
| Based on Auction Marketing Group's experience, most properties will sell at a foreclosure auction. Please note that property bought at foreclosure auction is bought at a distressed price. It may sell for a fraction of the fair market value. If you were to purchase the same piece of property through a traditional real estate sale, you will likely pay 100% of the fair market value.|
| Does the successful bidder have to pay out standing condominium fees?|
| If the condominium association has recorded a lien for these fees, the successful bidder (in most cases) would be responsible for the unpaid condominium fees. |