Posts tagged ‘Arizona’

What Really Happens at the Maricopa County Public Auction?

by: Maria Hass
It’s just another day at the steps of the Maricopa County Courthouse located at 201 W. Jefferson St. in Phoenix, AZ. The third session of the trustee sale also known as the public auction starts at 2 p.m. A crowd of eager investors wearing shorts, t-shirts, tennis shoes, flip flops and baseball caps gather around the youthful-looking auctioneer seated at the corner of the outdoor courtyard of the Maricopa County Courthouse building. For the first 20 minutes, the auctioneer announces any postponement or cancellations on 128 homes listed for auction at the 2 p.m. session. Two earlier sessions were conducted at 10 a.m. and 12 noon.

Once this is cleared, he opens the bid for each house on the list. A majority of the bidders are wholesale investors bidding for their company or bidding for a client. In May of 2008, out of 200 homes auctioned at the 10 a.m. and 12 noon sessions, eight of them actually sold. That would mean that 96% of the homes went back to the bank. The reason for the few sales is the high starting bids. There is an average of 400 homes listed for auction everyday and about 96% of them end up as REOs/bank-owned. However, the auction has become more competitive lately with more investors taking advantage of distressed homes and the percent of homes going back to the bank has been significantly reduced to about 50 percent.

Below are FAQ about the Trustee Sale or Public Auction:

1. Where and when does the public auction take place?
Every weekday at the steps of the Maricopa County Courthouse, located at 201 W. Jefferson St. in Phoenix. There are three sessions held at 10 a.m., 12 noon and 2 p.m. Sometimes, trustee sale auctions are held at the trustee office or lawyer’s office. A Realtor will be able to find out information on the trustee or you might be able to get this information at the county assessors website.

2. Who can bid at the public auction?
Anyone who has a $10,000 cashiers check is qualified to bid.

3. What if I win the bid?
Your $10,000 cashiers check will be withheld. The remaining balance is due no later than 5 p.m. the next business day. If you are not able to pay in full within the timeframe given, you will lose your $10,000 cashiers check and may be barred from future participation in the public auction.

4. What is the starting bid?
The bank decides what the starting bid is at a price they think is fair. Typically, half of the bids begin at a “full debt credit bid”. This bid is based on what is owed on the property, plus legal fees and other fees associated with the trustee sale process. In many cases, the starting bid is higher than the current value of the home. These homes usually go back to the lender. There is also the “Specified or Drop Bid”. This type of bid is specified by the bank and are drastically reduced overnight and could get snatched up pretty quickly by investors.

5. What should I do if I’m interested to bid in a public auction?– Conduct a due diligence review on the property you would like to bid on. Do a drive-by of the property, conduct a CMA. Know as much as you can about the property you’re interested in. Postponement and cancellations are announced minutes prior to the auction. Check frequently on the most current status of the property of interest to you.
– Structure your financing through a hard money lender before hand (regular banks don’t loan for properties bought in a trustee sale).
– Plan your investment strategy before securing a loan. E.g., how much money do you have for repairs, what is your holding cost, maintenance cost, tax liabilities, etc.
– What is your exit strategy if things don’t go as planned?

6. What type of deed do I receive at a trustee sale?
Trustee deed. This deed clears you from paying Junior encumbrances such as 2nd Mortgages, mechanics lien, contractors lien or any unpaid debt. This deed is subject to Senior encumbrances meaning, the buyer has to pay all senior liens such as taxes, IRS liens or any federal liens if any, to own the property free and clear. The Trustee deed is received a few weeks after full payment. Once the deed is received, it is the responsibility of the purchaser to record the sale and pay up all existing Senior liens.

7. What if the previous owner failed to pay taxes to the IRS and a lien is placed against the property?
The IRS is a senior lien and is allowed to redeem the property within 120 days after the sale. The IRS will return all purchase money to the buyer and add 6% interest of the purchase price per day to reclaim the property. You may get in touch with the IRS to see if they would release the lien for a negotiated price. Sometimes, the IRS may decide to go after the previous owner and release the lien at no cost or the purchaser may have to weigh out the 120 days redemption period.

8. Is this the best way to snatch up great deals?
In my opinion, buying an Bank-owned property is a better way to go. It is less complicated, easier and can offer you bigger savings. Once a home is bank-owned, banks are more desperate to get rid of the home because they have held the property for so long (at least nine months without seeing a penny). Also, according to mortgage financier Freddie Mac, the typical foreclosure cost is nearly $60,000. The banks lose around 20% to 25% of the loan’s value on a foreclosure. On top of this, REO (real estate owned) or bank-owned homes are available for showings unlike those homes in the public auction. As a buyer, you are able to see the condition of the home and also inspect the home prior to closing a deal. In a public auction, you buy the property site unseen without inspection in most cases. There is a bigger risk involved in purchasing homes at the trustee sale that may cost you sleepless nights.

9. Are All Trustee Sales Final or Absolute?
In some rare instances, the homeowner may have filed a bankruptcy just a few minutes before the sale. If this happens, the sale is reversed. All monies owed is returned to the buyer and the sale does not consumate.

10. Can the lender profit from a trustee sale?
No, if there are any surplus in the amount, this amount is alloted towards lawyer fees and processing cost.

11. What if the property I purchased in the trustee sale is occupied by the previous owners?
The right of the previous owners to live in the house terminates the moment the house is sold in the auction. The new owner has the right to evict the previous owners as soon as possible.

12. What if the property I purchased in the trustee sale is occupied by a tenant?
Under the Tenant protection Act good through 2012, the investor buyer has to honor the lease of the tenant. If the purchaser intends to occupy the property, the tenant has 90 days to vacate the property from the time of sale.

13. If it’s too risky to purchase a home at a Trustee sale, why do investors do it?A buyer can purchase a home quickly (within 48 hours) at a trustee sale. Whereas, it takes an average of 30 days for an REO or traditional real estate sale to close. If you do your research and due dilligence well, you’ll find some great deals at the public auction.

14. Who do I contact regarding hard money financing if I don’t have cash to pay for the property? Contact me at (480) 650-0075 for more information.
15. How do I learn more about the public auction process?
You may contact me at (480) 650-0075 to begin the process or to answer any questions that you may have.

To view a brief YouTube video of a Maricopa County real estate auction, click here.

Maricopa County Trustee Sale in Phoenix, AZ

Maricopa County Trustee Sale in Phoenix, AZ

August 10, 2011 at 7:05 pm 15 comments


The Chandler School District is hiring new teachers for the 2009-2010 school year. This welcome news is in contrast with many other school districts. Scottsdale, Kyrene, Mesa, Higley & Gilbert school districts will be trimming down their work force due to the economic crunch. Chandler was spared from the budget cut owing to increased enrollment this school year.

Many people find Chandler School district as a great choice for educating their kids. The district has over 20 schools that are ranked as excelling or highly performing schools. The homes in Chandler are still affordable compared to neighboring cities like Tempe and Scottsdale. It provides a great option for buyers seeking a quality life at an affordable price. One more reason why Chandler is a great place to live.

Click below for the complete AZ Republic story.

April 13, 2009 at 2:08 pm Leave a comment

Great News for Our Economy

I’ve said it before and I’m saying it again: The housing market is the fuel that will drive our economy forward.

The sooner we decrease the number of foreclosures in the Valley of the Sun, the sooner home values will stabilize. People will develop a better perception of the housing market and start buying and selling homes again. To make this come to fruition, lenders need to seriously look at modifying loans of distressed home owners to a monthly mortgage that is affordable to them. By doing so, homeowners will have money left to spend and consumer spending will increase. As a result, businesses will increase their revenue, expand their services and hire more workers.

There was a welcome surprise in Saturday’s Arizona Republic — what I had hoped for is coming together. The article reported that Bank of America is halting 2,000 foreclosures in the Valley by initiating a loan modification plan for borrowers. Rick Simon, spokesman for Bank of America, said they will contact homeowners once their home-retention program is ready by early December. About 13,000 borrowers will benefit from the loan modification program, according to the Arizona Attorney General’s Office.

Bank of America hopes that other lenders will pick up on this effort. But for now, this is great news for the housing market and the economy as a whole.

Click on the link below to view The Arizona Republic article:

November 2, 2008 at 9:25 pm Leave a comment

Recent Observations on Investing in Arizona’s Real Estate

It doesn’t really matter what the media is reporting — what matters is what I see daily in the industry that I breathe day in and day out. Here are a few of my recent observations:

1. A Great Market for Investment – Today’s market offers a great opportunity to buy homes at deep discounts. Arizona homes are selling at clearance prices – 50 to 60 cents on the dollar. This is a historic time. “Buy Low, Sell High” has always been a good investment strategy. But sometimes, due to our short-term perspective and emotional fears, we tend to defy logic.

Today’s market offers first-time home buyers a $7,500 tax credit if they purchase a home between April 9, 2008 and July 1, 2009. For those renters who are watching their rent money go down the tube with no return whatsoever, this is the time to seriously look into the advantages of home ownership.

The Arizona Republic reported Arizona’s unemployment rate is 5.9 percent as of September 2008, which means 94.1 percent of the Arizona population still have jobs. Interest rates are still at low levels, averaging in the low to mid 6 percent range. The real estate market in Phoenix is poised to come back quicker than other cities because of the region’s robust infrastructure, affordable housing and vibrant lifestyle.

2. Don’t be Afraid to Sell – Yes, we have heard a million times about foreclosures rising, forcing home values to come down. But foreclosed homes affect areas in different degrees. Tempe, Chandler, South Scottsdale, Gilbert and parts of Phoenix home values are holding up better than Queen Creek, Maricopa, Apache Junction. These areas don’t have many foreclosed homes.
I sold a house in two days in Chandler. I sold my own home for full price in this market. If your home is priced correctly, shows well and is in a sought-after location, you really don’t have anything to worry about. However, if you your home is overpriced, you’ll get many showings without an offer. Buyers in this market will not pay for overpriced homes. As sellers, it’s always important to know the reason why you are selling and to be ready to negotiate.

3. The Market is Volatile – What this means for buyers is that the lending guidelines and loan requirements may change. As financial institutions struggle with credit, applying for a loan will require some patience from both the buyer and seller to close the deal.

Now, more than ever, is the time to act on an investment plan. If you have good income and credit and plan to hold the home long -term, this is a great market for you. If you are interested in taking advantage of this amazing buying opportunity but don’t know where to start, you know where to find me. I will simplify the process for you.

November 1, 2008 at 11:29 am Leave a comment

Buying Another Home Before Foreclosure – Can it Happen?

I received a call from a homeowner who wanted to keep his house, if he could get the bank to modify his loan. During the course of our conversation, he asked if it would be okay for him to buy another home at a much better price, while his credit is still good, and prior to being foreclosed on.

Let’s take a look at what he would need to do to qualify for both loans.

Aside from good credit, our caller has to prove that he has enough income to pay for two mortgages (the old house and the new house). He also has to put down at least a 20 percent deposit in order to buy a second home as an investment.

I have heard that some people who have been foreclosed on are using a family member or friend’s good credit and income to purchase a new home. If this is so, that family member or friend will take ultimate responsibility for paying the loan and his or her credit is in jeopardy if the true homeowner defaults on payments.

Before getting yourself into any of these housing transition strategies, consult a reputable and honest lender. What you don’t know may bite you later on and may cost you a lot of money, if you are found guilty of mortgage fraud.

The best advice I can give anyone is to live within your means. If you are looking to buy another home someday, now is the time to increase your income or spend less and save more money for your future down payment. The sooner you build up your reserves, the better position you will be in to take advantage of the incredible buys in today’s real estate market.

October 24, 2008 at 11:21 pm Leave a comment

Calling All Voters!

There was a low turnout of voters in last week’s September 2 election.  I’m proud to say that I was one of the few American citizens who exercised her right to vote.  Many did not even know there was an election going on.  Despite a busy schedule, I went to the polling place to vote to influence the future of our nation and the City of Chandler, where I am a resident.

I was particularly interested in influencing the outcome of the three open City Council positions for the City of Chandler.  There are six candidates for the positions.  I watched the six answer questions at an excellent open round table discussion hosted by the City and aired on Cable Channel 11.  Based on this telecast, I voted for Matt Orlando, Rick Heumann and Jack Sellers.  However, after the votes were tallied, all candidates where short of the required minimum of 50% vote, so the process will be repeated  in the Primary election in November 2008 — thanks to all of you who did not show up!

It is sad that many of our countrymen would rather attend a sports event and pay lots of money to do so than to visit a polling place to bring about change.  The future of our nation is in our hands.  And one person can make a difference!  Just as the once successful singer Michael Jackson said in his song: “If you want to make the world a better place, take a look at yourself and make a CHANGE!”

Now is your chance to make a change — take the chance before it’s too late. On November 4, when you cast your vote, vote YES on Proposition 100 – “Protect Our Homes.” A YES vote means saying NO to establishing a real estate transfer tax in Arizona.

If you don’t show up to vote, be ready to pay a real estate transfer tax in the near future.

October 23, 2008 at 2:53 pm Leave a comment