Understanding the Trustee Sale Auction Process from start to finish and
Net Growth Realty’s full circle, full service.
Net Growth Realty, Inc. takes every necessary
step to help our clients understand, prepare, bid and close the deal.
But what really differentiates
ourselves from our competitors is what happens after the deal is closed. Then
what? We add more value to your investment coordinating your repair work,
securing occupancy and managing your investment so your hard working investment
now becomes a driving force creating income while preserving your initial
capital investment and growing over time.
All your rental income gets
deposited directly into your bank account. Net Growth Realty, Inc. holds none of
your money except for the initial earnest money to secure your investment
property.
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A Trustee Sale is a public auction that is open to all bidders, where
the property is usually awarded to the highest bidder who meets all of
the criteria set by the trustee. A trustee is an individual or company
chosen to administer the assets of the beneficiary and facilitate the
foreclosure process. The Trustee Sale is a verbal auction usually
conducted on the exterior steps of the local courthouse, or at the
trustee’s office. The successful bidder will receive title via a
Trustee’s Deed. |
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Q. What types of properties will be sold at a Trustee Sale auction? |
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Almost every type of real estate can be auctioned during a Trustee Sale,
including residential homes, commercial property, vacant land, and
multi-family apartment buildings. Essentially, if a Trustee’s Deed
exists for real property, that real property can be auctioned via
Trustee Sale. |
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Q. What is the typical timeline for a Non-Judicial Foreclosures /
Trustee Sale? |
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Q. Who owns the properties that are being offered at the auction? |
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Until the Trustee Sale process has concluded, these properties are still
owned (by Trustee’s Deed) by the homeowner (i.e., the person or entity
that has promised to pay the note owed against the property)If a third
party (i.e., you) does not bid above the opening bid price set by the
trustee, the property becomes lender/bank owned. If a third party is the
successful high bidder, the property becomes the property of that bidder
after the winning bid has been paid in full by the end of the next
business day.
It is imperative that when bidding on a
Trustee Sale auction, you make sure that the deed on which you are
bidding is in "first position" and is not a second mortgage, line of
credit, or home equity loan; in most cases these deeds are worthless and
have no priority over any first position (or first mortgage) that may be
outstanding.
FOR THIS REASON IT IS IMPERATIVE TITLE
SEARCHES ARE CONDUCTED THE DAY OF THE SALE.
There are tax liens, past liens that may need to be cleared after the
sale, and most of all the concern of bidding on a second position.
Any liens that are in the subordinate position go away except IRS liens.
Net Growth Realty, Inc. takes this necessary step for our clients as
part of our full service full circle solution. |
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Q. How were the opening bid values determined? How current are they?
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The opening bid is "influenced" by many factors, including: A) the
amount of the full debt owed to the beneficiary of the deed (i.e., the
lender); B) the lender's desired minimum value of the property in
connection with the most recent mortgage on the property; C) the most
recent asking price adjusted by market conditions; D) the assessed
value; or E) the most recent broker price opinion. Trustees and the
beneficiaries that they represent do not use any publicly available
formulas - each opening bid is uniquely determined on a case-by-case
basis. |
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Q. Should I go to inspect the property prior to bidding at the auction?
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Yes, yes, yes! The only way for you to make an informed decision when it
comes to bidding and buying is to not only visit, view, and inspect the
property prior to the auction, but also to read and review any property
information and disclosure documents pertaining to that property. Do
your investigation. Make your inspections. The time involved with doing
a drive-by inspection of every potential property for the chance that
you will be the highest bidder can be a large investment if you are
planning to tackle that chore on your own. Net Growth Realty, Inc.
includes in our full circle full service solution an initial drive-by on
properties that may interest you. Using our drive-by as the first phase
of your property evaluation can save you time and money. This leg work
will help you get the information you need to make sound decisions.
*Note: information regarding occupancy may not
be complete on drive-by reports due to limited or unavailable access to
a property. Also, remember that all properties are sold as-is, and
any pre-existing problems with the properties being auctioned become the
sole responsibility of the winning bidder. Therefore, it is of the
utmost importance to obtain as much information as possible about the
property before bidding on any Trustee Sale auction. |
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If you are the winning bidder at a Trustee Sale, and you have paid for
the property in full by 5:00pm the next business day, that property is
legally yours once you receive the Trustee's Deed. However, the
Trustee’s Deed does not give you an automatic right of possession. After
you receive title, you must negotiate with any occupant of the property
to arrange for a voluntary inspection and surrender of the property.
In many cases you will find current tenants
will want to stay on as renters and may or may not have been aware of
the public auction. You will even find owners who are also interested in
staying as renters as many homeowners over extended themselves back in
the mid 2000’s when the housing market prices were over inflated and
mortgage payments became too excessive.
However, in many instances you will
have a vacant property that is in need of some type of repair work. On a
rare occasion if the occupant does not cooperate, you must resort to an
eviction lawsuit. |
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Q. Can I bring a contractor with me during a drive-by inspection?
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Yes! We highly recommend that you seek the advice of a knowledgeable
(and preferably certified) contractor or home inspector. |
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Q. What do I need to do to bid on a property going up for a Trustee Sale
auction? |
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First, you must register with Net Growth
Realty, Inc. (it’s free to sign up).
Complete
the Contact Us page on our website. After you have registered, one of
our Net Growth Realty, Inc. professional members will call you to get an
understanding of your investment objectives and to answer any questions
you may have. Next, in order to become a Net Growth Realty, Inc. client,
you must transfer a $10,000 earnest money / bidding deposit to David
Leeper, Net Growth Realty, Inc. This earnest money is required by the
State of Arizona for all persons bidding for a Trustee Sale property. It
will be held in a secure account and can be refunded at any time prior
to you becoming a winning bidder.
*Note that the $10,000 earnest money can be used to bid on any property,
but it may only be used on one property at a time. So if you are hoping
to win more than one bid in a day, you need to have a $10,000 deposit
for each separate property. |
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No... However, the bidding experience can be a little daunting even to
seasoned bidders. That's where Net Growth Realty, Inc. comes in. Let us
do the bidding for you, the repair work, help obtain or even retain the
tenants/prior owners and offer our property management services…full
service and full circle solution. We will help you every step of the way
to your path to financial freedom.
Many new Trustee Sale investors underestimate the time required to
attend the auctions day-after-day hoping that the property they want
will not be postponed. Then, once the property they are tracking
actually goes to auction, many new bidders can have their winning bid
needlessly run up too high by unintentionally tipping off other bidders
that they have interest in the property. Net Growth Realty, Inc. does
the time-consuming bidding task but not only that helps you identify
properties as well. Remember, we don't charge any acquisition fees
unless you win the auction. |
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By and large, bidding for properties at Trustee Sale auction is very
safe and straightforward. However, even though collusion is an illegal
practice, in the free-for-all setting of unregulated public Trustee Sale
auctions, it is very hard for a passive or new investor to compete on a
level playing field. If you are not a professional bidder, or not
represented by one, it can be a very costly and frustrating experience
to "learn the ropes" as a novice participant. Net Growth Realty, Inc. is
a reputable company doing business for over 10 years. We believe that
all qualified parties should have the right to compete fairly and
ethically in a transparent forum to purchase assets at Trustee Sales. We
believe this is a sound course of action towards your path to financial
freedom. |
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State of Arizona law requires that any party that intends to bid on a
property at a Trustee Sale must provide proof of funds in the amount of
a $10,000 as a bid deposit. These funds must be in the form of a
certified cashier's check and, more often than not, must be made payable
to the Trustee conducting the sale. Additionally, you are required to
have a $10,000 check for each property that you intend on buying.
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Q. What if I buy more than one property - what is my Earnest Money
Deposit requirement? |
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The State of Arizona requires a cashier’s check in the amount of $10,000
for each property purchased, with the balance due on all properties
before 5pm the following business day. You can bid on as many properties
as you would like, but when you win with the highest bid you are
required to provide the $10,000 deposit at that time. |
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Q. What if I change my mind? Can I cancel the transaction after the
fact? |
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No! Once the auctioneer has announced "Sold!" you have agreed to
purchase the property. There is no rescission or "cooling off period".
That is it why it is important for you to conduct all of your due
diligence and inspections prior to bidding on the property. Do not bid
on any property that you do not want to own. If you are unable, or
unwilling, to complete the sale after you have provided the Trustee your
$10,000 bidding check, your check may not be returned to you, and the
Trustee may decide to pursue you for the remaining balance of the
difference between the winning bid and the bidding deposit. |
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Q. How do I know that the title to the property is clear and whether
there are any liens on the property? |
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Many homes that are in the foreclosure process have outstanding federal,
state, or local taxes owed, as well as delinquent HOA dues, assessments,
or fines. It is very important that all due diligence is performed to
make sure that the property in which you are investing is exactly what
you think it is and that you know and understand any outstanding
fees/liens that are not eliminated during the Trustee Sale process.
As mentioned earlier above, it is imperative
that when bidding on a Trustee Sale auction, you make sure that the deed
on which you are bidding is in "first position" and is not a second
mortgage, line of credit, or home equity loan; in most cases these deeds
are worthless and have no priority over any first position (or first
mortgage) that may be outstanding.
FOR THIS REASON IT IS IMPERATIVE TITLE
SEARCHES ARE CONDUCTED THE DAY OF THE SALE.
There are
tax liens,
past liens that may need to be cleared after the sale, and most of all
the concern of bidding on a second position. Any liens that are in
the subordinate position go away except IRS liens.
This “call on the day of title search” is not a
guarantee that the title is free from defects and/or superior liens. |
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Q. Is there a redemption period where the former owner can make good on
their debt? |
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No! These are all bank-owned properties; the foreclosure process has
been concluded and finalized |
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The opening bid is set by the Trustee and/or the foreclosing
beneficiary. Although typically published at least 24-hours prior to the
actual auction time, the opening bid can change several times leading up
to the start of the auction, including as late as one hour before the
auction. |
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A max bid is the highest amount an investor would be willing to bid on a
property. This does not mean that the investor will spend that amount.
Only if other bidders increase, or bid against the investor, will his or
her bid go up any more than a hundred dollars at a time. Take the
example of a home that has an opening bid of $50,000 and an Net Growth
Realty investor has set their max bid to $70,000. When the auction
begins, an agent for Net Growth Realty, Inc. will begin with an opening
bid of $50,001 for the property. If no other investors bid on the
property, then the Net Growth Realty, Inc. investor will be the winning
bidder, and their $10,000 earnest money check will be given to the
trustee. Then, by 5pm the following day, another cashier’s check in the
sum of $40,001 will be required to pay the balance. Please feel free to
call us at any time to speak with a Net Growth Realty, Inc. professional
team member or your agent at (602) 200-9939. |
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Yes. You determine your bidding limits, and as long as you have enough
funds, you can bid on more than one property. Make sure that you have
$10,000 for each property for which you wish to bid. |
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You may bid on as many properties as you like as long as you have a
$10,000 bidding deposit for each property. If you are not the winning
bidder on a property, then your $10,000 will be held until you request
it to be returned to you or you become the winning bidder on a
subsequent property. |
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Yes! We are a phone call away!
Your personal agent will be available
for those last minute bid amount changes. |
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The auction ends when the auctioneer closes the sale by publicly crying
out that the property has been sold, and the winning bidder gives the
auctioneer their $10,000 bidding deposit. At that point, no other bids
will be accepted on the property. The exact timing of this process
varies greatly between auctioneers. Some auctioneers move the auction
process along extremely quickly, calling the sales at rapid pace, while
others move very methodically and predictably. For this reason, it is
imperative that you know your bidding numbers and strategy prior to
actually bidding. Do not panic. Know your numbers, and do not go above
your maximum bidding number. |
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There can be as many as six auctioneers from
various trustees all auctioning/calling properties at the same time.
This makes the bidding process extremely difficult for a solo investor
trying to follow multiple potential investments that may be being sold
at the same time.
We
do our research ahead of time to identify those properties that meet
your criteria that’s part of our first “full service, full circle
solution” for our clients. |
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At the conclusion of the bidding, after no other bids are received and
the auctioneer declares a property sold, if you are the highest bidder,
then you will have won the auction. You will shortly receive a personal
call informing you of your win and for how much the winning bid was. At
this point, you will have until 5pm the following business day to have
the remaining balance paid, or you will forfeit your $10,000 earnest
money and face possible litigation. |
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Q. I received an email stating I am the highest bidder, what do I need
to do? |
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Once your winning bid
personal
call arrives or please feel free to contact us at (602) 200-9939.
You have until 5pm the following business day to have the remaining
balance paid, or you may forfeit your $10,000 earnest money and face
possible litigation from the Trustee. |
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Q. What is the history behind Net Growth Realty, Inc.? |
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Please visit our page at
About Net Growth on
our website for more information
about us.
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Q. What is the company contact information? |
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Net Growth Realty, Inc.
Phone: (602) 200-9939 |
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