Frequently Asked Questions
DISCLAIMER: Answers to these questions are answered to the best of our ability, but are not guaranteed to be the absolute final answer. You would be wise to consult an attorney specializing in real estate and/or foreclosure law.
Click on any of the questions below to quickly access the answer. If your question is not listed, please email Us.
Q: Should I buy a property at auction?
Q: What are the risks involved in buying property at auction?
Q: If an owner is selling his property at auction, doesn't that mean he is in financial trouble?
Q: Why is the auction method the best way to sell property?
Q: Why do a lot of houses go begging for buyers or are sold for a low price (or at least low prices are offered)?
Q: Where are foreclosure sales advertised?
Q: I see advertisements for teaching me how to buy property at auction for no money down. Is it possible?
Q: If a house is selling at foreclosure, should I consider bidding on it?
Q: What is a "Trustee's Sale" or "Substitute Trustee's Sale"?
Q: Is the Contract of Sale I signed for my present house different from what I'll be signing at an auction?
Q: If I decide I don't want the foreclosed property after I bought it at auction can I get my deposit back?
Q: How long do I have before I have to settle?
Q: How do I arrange to look at the property?
Q: I just bought a property at auction; the trustee didn't give me a key. Why not?
Q: What if the debtor is still living in the property?
Q: Once I've purchased a property at auction, does the owner have the right to bring a property current before settlement with me?
Q: If for some reason the Circuit Court should rule that a sale is invalid, do I lose my deposit?
Q: How can I find out what is owed on the property?
Q: What about other liens and judgments against the property?
Q: The deposit amount in the advertisements states "cash or certified check". No personal checks, credit cards, etc.?
Q: What does it mean if a property is crossed off on a recently dated upcoming sales list? Does it mean the property was sold at auction?
Q: How do I find the liens on the property?
Q: There is a house that has been listed in the paper for foreclosure and will be auctioned in two weeks. Is there anyway an investor can purchase the house prior to the auction?
Q: Does the auctioneer set an opening bid and can this be construed to be the minimum bid?
Q: Will you disclose a lender's bid on a property prior to the auction?
Q: Will you accept personal check with proof of funds?
Q: Are the deposits always reflective of 10% of the loan amount?
Q: Is there any location or way that I can get results of your courthouse auctions?
Q: Can you automatically email weekly/daily on new properties going to foreclosure or do I have to check your site all the time?
Q: If a member of my family is going through a sale of their property at an auction on the court house steps can I purchase that property and allow them to remain on it?
Q: What are the increments the auctioneer goes up during the auction process. Is it $500 at a time or $1000 at time?
Q: Should I talk to my attorney about the whole process?
Q: Can I contact you with any other questions I might have?
Q: Should I buy a property at auction?
A: The auction method of selling real property is simply one method of transferring ownership of a property. A potential buyer should examine the method just as he or she should examine any other method of sale.
Q: What are the risks involved in buying property at auction?
A: The risks are basically no different from any other type of sale. As a buyer, you need to do your "due-diligence" whether it's an auction sale, sale through a real estate agent, or a private sale by owner.
Q: If an owner is selling his property at auction, doesn't that mean he is in financial trouble?
A: Perhaps you have never seen a Sotheby's or Christie's auction. These well known auction galleries sell art works, antiques, etc. for owners who are not in financial trouble. Why should a real estate sale be any different?
While the vast majority of real estate auctions are distress sales, they are not the only sales. This simply points out that the court systems of the United States have determined that the auction method is the best way to sell a property in an above board manner with nothing hidden.
Q: Why is the auction method the best way to sell property?
A: In a well publicized auction, everyone who has interest in the property, real or personal, is gathered together at one time, after having adequate time to inspect the property, and the highest bid forthcoming then is the "Fair Market Value". It's the same concept that the art galleries use to sell a Renoir.
Q: Why do a lot of houses go begging for buyers or are sold for a low price (or at least low prices are offered)?
A: Look at the real estate listings that last week after week. Have all those houses been sold?
Of course not, or they wouldn't be listed. The interested party or parties just haven't been found yet. Or the asking price is too high. The auction method of marketing brings buyers and sellers together at one time thus creating more competition.
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Q: Where are foreclosure sales advertised?
A: In jurisdictional "newspapers of record". Every county and city has at least one. A foreclosure sale is required to be advertised a specific number of successive weeks prior to the sale.
Q: I see advertisements for teaching me how to buy property at auction for no money down. Is it possible?
A: It is within the realm of possibility, particularly if an owner has a property that is not particularly desirable, and is willing to do almost anything to move the house. But the reality is that most property sales require deposits, generally in the range of 10%-15% of the desired purchase price.
Q: If a house is selling at foreclosure, should I consider bidding on it?
A: Sure you should, if you are interested in the property!
Q: What is a "Trustee's Sale" or "Substitute Trustee's Sale"?
A: The "Trustee" or "Substitute Trustee" is the authorized individual or individuals, who are acting as agents of the court, who oversee the sale process, making sure that the property is sold in a fair and equitable manner to the maximum benefit of all concerned parties. Some states refer to them as Sherrif's sales.
Q: Is the Contract of Sale I signed for my present house different from what I'll be signing at an auction?
A: It probably is. There are several factors in an auction that are different from a sale by a private party or a real estate agent transaction. In an auction situation, for a Trustee or Substitute Trustee, they are charged with selling the property. Usually the property will be sold "AS IS" with no warranties. The buyer will be paying all closing costs and you will not have the right of inspection for further negotiation after the sale, that is all done prior to sale day.
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Q: If I decide I don't want the foreclosed property after I bought it at auction can I get my deposit back?
A: Generally no. The contract usually states that the buyer is tendering a non-refundable deposit and if the buyer doesn't go to settlement the property will be re-sold at his risk and expense.
Q: How long do I have before I have to settle?
A: You usually have at least 60 days from the day of sale, and sometimes longer, to settle.
Q: How do I arrange to look at the property?
A: If it is an auction sale by a private party, usually there will be open houses or you can arrange with the auctioneer to see the property. In an auction situation, you often do not have access. It is your decision how you obtain details concerning the property. In most real estate foreclosure sales neither the auctioneer nor the Trustee has access to the property. In other cases, open houses are conducted and the property can be viewed just as in traditional property sales.
Q: I just bought a property at auction; the trustee didn't give me a key. Why not?
A: You don't own it yet, and, because the Trustee may not have a key yet. The debtor still has possession until the jurisdictional Circuit Court ratifies the sale and the property goes to settlement.
Q: What if the debtor is still living in the property?
A: Generally, but not always, the debtors have moved out by settlement time. An action filed with the local Sheriff is sometimes needed. I would suggest you talk to your attorney.
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Q: Once I've purchased a property at auction, does the owner have the right to bring a property current before settlement with me?
A: Generally not. Once the auctioneer's "hammer falls", the property goes to the ratification process. The 30 day ratification period allows the court to examine any objections to a sale. It's very rare that an objection is allowed to overturn a sale, simply because the laws governing a foreclosure action are closely adhered to by trustees.
Q: If for some reason the Circuit Court should rule that a sale is invalid, do I lose my deposit?
A: No, your deposit is returned.
Q: How can I find out what is owed on the property?
A: The "Statement of Debt" is filed with the foreclosure papers in the Circuit Court. They are available to the public. A few Trustees will tell you. And fewer still list the statement of debt in the legal advertisement.
Q: What about other liens and judgments against the property?
A: All liens junior to the lien being foreclosed on are wiped out under Maryland law. Federal tax liens are first in line and if there is one it should be announced.
Q: The deposit amount in the advertisements states "cash or certified check". No personal checks, credit cards, etc.?
A: Do as the ad states or you most likely will not be allowed to bid. Most Trustees are rigid in that requirement. Make the certified check out to oneself unless the advertisement states otherwise. Its easier to put back in the bank if you are not the successful bidder.
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Q: What does it mean if a property is crossed off on a recently dated upcoming sales list?
Does it mean the property was sold at auction?
A: It means the sale has been canceled, for many reasons. Usually we don't know why.
Q: How do I find the liens on the property?
A: You will have to do a search of the records. Or hire someone to do so.
Q: There is a house that has been listed in the paper for foreclosure and will be auctioned in two weeks. Is there anyway an investor can purchase the house prior to the auction?
A: Sure! Go make the owner an offer!
Q: Does the auctioneer set an opening bid and can this be construed to be the minimum bid?
A: Often the auctioneer asks for an opening bid, and then asks for lower until a bidder chimes in. Often the lender enters an opening bid, and the bidders must go up from there if they wish to buy.
Q: Will you disclose a lender's bid on a property prior to the auction?
A: No.
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Q: Will you accept personal check with proof of funds?
A: No. Only the terms set forth in the legal advertisement will be followed.
Q: Are the deposits always reflective of 10% of the loan amount?
A: Not always. One of our clients does 15%; it's merely dependant on the trustee. Others still may simply do a flat fee such as $5,000 or $10,000.
Q: Is there any location or way that I can get results of your courthouse auctions?
A: You might try calling the trustee's office. You can always watch the same newspaper that the legal ad appeared in, during the following two weeks for the notice of sale results.
Q: Can you automatically email weekly/daily on new properties going to foreclosure or do I have to check your site all the time?
A: Our e-mail list is used rarely (and of course never sold or given to anyone else), and then only for a short notice sale, something out of the ordinary, or something of general interest. Yes, you need to watch our website for new sales.
Q: If a member of my family is going through a sale of their property at an auction on the court house steps can I purchase that property and allow them to remain on it?
A: If you buy a property at auction, you can rent it, give it, or sell it, to anyone you want. It's your property.
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Q: What are the increments the auctioneer goes up during the auction process. Is it $500 at a time or $1000 at time?
A: It's up to the auctioneer. Depending on the bidders' desires and where the bid has to go for the property to be sold, larger increments are often called for.
Q: Should I talk to my attorney about the whole process?
A: I would advise you to do so. If you are not comfortable overseeing any real estate transaction, it is always wise to talk to the experts.
Q: Can I contact you with any other questions I might have?
A: You bet! Send us an email here.
Answers to these questions are answered to the best of the auctioneer's ability, but are not guaranteed to be the absolute final answer. You would be wise to consult an attorney specializing in real estate and/or foreclosure law.
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