Editor’s Note: This is the last of three posts about buying a house at a greater Phoenix metro-area auction (Maricopa and Pinal County). I’m not an attorney or expert when it comes to foreclosure. I’m not buying 3-5 houses a day at the courthouse steps. I don’t even purchase 3-5 houses a month. However, I’ve done my share of deals, about 20-30 a year for the past three years, so I feel like I’m qualified enough to explain in generalized terms how it works.
Taking Ownership of the Property
Congratulations! You won the bid. Except don’t expect 30 pages of escrow documents proving you’re the new owner. You won’t get the keys to the property either. It’s up to you to have the locks changed if the house is vacant. If the home is occupied then hire an attorney to do an eviction for you. All you’ll get from the auctioneer is a one-page vesting sheet.
What’s a vesting sheet?
Basically, it’s a receipt for $10,000 that says you were the winning bidder. The auctioneer will ask how you want title vested. If you want the title in your name then give them your name. If you want it in an LLC then give them your LLC’s name – pretty simple.
In about 2-3 weeks you’ll receive the trustee’s deed in the mail. This is the certified document that gives you title to the property and it’s up to you to make sure it’s recorded with Maricopa County. Don’t lose this. That would be very bad.
And now that you’re the new owner of the property you’ll be responsible for all of the stuff homeowners have to be responsible for – back property taxes, homeowner’s association dues and most importantly, insurance. Whether you’re paying cash or getting a hard money loan it’s imperative to obtain insurance, especially if there’s someone still living in your house.
There are insurance companies that will underwrite a policy on a vacant house, for a steep price of course.
Buying a house at the courthouse steps is not for primary homebuyers or the novice real estate investor. As you heard from professional bidder Dusty Figgs there’s a lot of homework required prior to the trustee’s sale. You’re better off hiring an experienced bidding service to help you.
I’ve been fixing and flipping houses for 10 years and I still use a bidding service. Why? Because I don’t have the time to be at the courthouse steps everyday. Nor do I have the resources to pull title and drive by 10-15 houses a day.
AZBidder.com does all of this for me (by the way, I get nothing from AZBidder for these blog posts, I’m just a very satisfied customer). And yes, there are other companies here in Phoenix that offer similar services. I just believe that the guys at AZBidder.com do it the best.
Here’s one last interview with Dusty Figgs. He’ll give you some real world examples of why using a professional bidding service is the difference between winning a bid and losing your assets.