What’s the scoop here? Any and all real estate infomercials grab my eye. Why? Because, they are trying to sell a lot of real estate quickly. Why would a bank agree to sell through a large public auction? Money.
Real estate auction companies promise big profits to corporate clients. The goal of an auction is to create demand (aka a seller’s market). 
Let me repeat, AN AUCTION’S ATTEMPT IS TO CREATE A SELLERS’ MARKET.
Ask yourself, are WE in a sellers’ market?
What does this mean for you? It means that if you go to the Minneapolis auction you will think everyone sitting next to you in the uncomfortable chairs is bidding on your dream home, that first investment property, your retirement cabin, that attractive land holding, the opportunity in that commercial property, etc. How do you think they pay for those l-o-n-g info commercials? I work with lenders every day. They watch the bottom line very closely.
A margin is made.
I am not saying that a good deal cannot be found at an auction. I just encourage buyers to be well informed, and use discipline at the auction. There are a few simple rules which will help you overpaying at an auction:
- View the property prior to the auction. Pictures are not always the best representation of a property, and rarely tell the whole story.
- Have the property inspected prior to the auction if possible to be aware of any defects. If not possible, use an inspection contingency.
- Pull title prior the home auction. If your title company can pull title prior to the auction you can be aware of any clouds on title, and/or assessments, past due taxes, and past due association fees (if applicable).
- View city inspection reports. If the city requires an inspection, the inspection should generally be completed prior to the auction. Call or visit the city offices and review the inspection results to be aware of any code violations.
- Set a pricing strategy and stick to it. The discipline to stick to your pricing strategy may save you thousands. Do not overpay because your adrenaline level is through the roof.
The best thing a buyer can do is to work with an agent who understands the market. Be an informed buyer in Minnesota’s current market, and work with the #1 Re/Max Real Estate Team in Minnesota and the #24 Re/Max Real Estate Team on EARTH for 2008!
We have experienced frustration representing buyers on foreclosures and short sales that go into multiple offer situations. Too often the listing agent will not disclose basic information: How many offers are on the table? Are we the best offer? When will the seller make a decision? Is the listing agent representing a buyer?
REO and Short Sale listings are routinely going into multiple offer situations these days. Don’t get stuck in the dark! You will be happy to know that our clients promptly select one offer to work with, and consider the other offers as backups only. If we can help with questions feel free to contact us anytime (we are available 7 days a week). We look forward to working with you.
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Frozen Toilet
In Minnesota our temperatures vary drastically from January to July. We need to protect our homes and investment property from the elements. If a property is not occupied it should be winterized during our cold months. Even if the heat is on at a property the danger of damage still exists if it is not occupied. The boiler or furnace may malfunction, and with no one present to catch it problems can happen quickly.
Freeze damage is not fun to fix.
If you are facing foreclosure you should really be aware that freeze damage may affect you. How? Let’s say John Doe owns an older duplex with a mortgage balance of $100,000. After John missed four mortgage payments his mortgage company initiated the foreclosure process. The reason John Doe missed payments is that he could not find qualified tenants to rent his two units.
Frozen Water Meter
The market value is now $75,000 and John does not have the money to pay the difference at closing. The property is now headed for foreclosure. John doesn’t take the time to winterize the place, and stops paying his utilities and insurance.
It is February and the boiler goes out. As a consequence, the water trapped in the registers and plumbing throughout the property freezes. The problem is that when water freezes it expands. The pipes in the duplex crack and break violently as the pressure within them is released. The plaster walls encasing the pipes crumble and the hardwood floors covering them buckle. The tanks of the porcelain toilets shatter.
You may think that John Doe has nothing to worry about. After all, the bank is taking the property back and they can deal with the damage, right? Not exactly. The problem is that now John’s duplex is going to sell for less. It is listed as an REO and sells for $50,000. What does this mean for John? It means that his mortgage company will receive less than half of his loan balance. It also means his financial liability to the mortgage company just DOUBLED. If the lender chooses to go after John they will be seeking much more than if John took the time to winterize his investment property. If you have a vacant property please take time to secure and winterize it.
Personal Property at a Foreclosure in Minneapolis
Most of us never have to see a house that was once a home with personal property strewn all over the place. As a real estate agent who specializes in foreclosures I see it far too often. It is an unfortunate time when homeowners have to grab their belongings while a sheriff’s deputy shadows them, and find a new place to call home. It can be more traumatic for a family renting a property that has gone to foreclosure, especially if language barriers exist. Imagine a sheriff’s deputy showing up and asking you to remove yourself and your belongings pronto. It doesn’t always happen that way, of course, but it does happen.
Where does all this stuff go?
Most agents and buyers shopping in our current market do not have to witness a scene scattered with stuff from the previous occupant. The reason is that when a property goes to foreclosure the entity that now owns the property will contract a third party to clean up the mess, otherwise known as a “trash out” to those in the real estate field. The third party will come in and remove what was left behind by the previous owner and/or occupant. This is usually completed prior to the property going on the market and being advertised on the MN MLS.
Where does all this stuff go? Typically, to the dump. Anything of value is usually removed prior to foreclosure.
The picture included in this post was taken from a foreclosed home in Minneapolis while I was performing a valuation for the REO servicer.
What’s the scoop here? Any and all real estate infomercials grab my eye. Why? Because, they are trying to sell a lot of real estate quickly. Why would a bank agree to sell through a large public auction? Money. 
