Trying to buy a property at a probate auction sounds scary to many. Sure, there are some uncertainties, such as the price you’ll pay. But once you know the steps, what once seemed insurmountable just might be a cakewalk.
For starters, find a property that has been identified as a probate auction. This usually happens after a homeowner doesn’t pay the mortgage or taxes and the bank files a notice of default with the county recorder. If the homeowner doesn’t pay the balance owed or renegotiates the loan with the lender, it can go to auction. This may take anywhere from a few months to a year or more.
Once you find an property to be auctioned, many times there will be a preview. This allows you to actually visit the property, talk to a representative from the firm handling the auction, and get an idea of what’s waiting for you should you move forward.
On the day of the auction, you (and your REALTOR if you have one) show up 30 to 60 minutes prior to the auction time so you can register and receive your bidder card. You also should have in hand a check cashier’s check made payable to the firm (in most cases) handling the auction along with a blank personal check used for a 10% deposit should you win.
Now you’re ready to go. But be prepared it goes quick! It’s a live auction that is wrapped up in as little as five minutes!
One final detail to consider is probate sales are subject to the Court Confirmation. The court can accept a higher bid if they are made in court and they are in an amount equal to or higher than the first minimum overbid which is 5% (plus another $500 of the auction day bid). This idea of showing up to court and outbidding someone who won at auction can be frustrating so being prepared is essential. This way you aren’t surprised and can manage your expectations and know how to proceed should this happen to you.