Master Commissioner's Sale

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Real Estate Agent with Elite Realty Group

Today I went to the McCracken County Master Commissioner's Sale. It was held at 1:30pm inside the courthouse at the steps going upstairs. This was my first time attending one of these so when I had always heard someone saying "courthouse steps" I always thought they meant outside. Turns out it's inside.

Up for auction today were 11 properties. Four properties were removed from the list as a sale or something had enabled their removal from the list. Properties ranged from around $23,000 to $229,000. There were probably 30 to 40 people there. I noticed a couple of other agents there. I assume with clients. There were at least a couple of attorneys there representing lenders.

I had many reasons for attending. I wanted to learn if it was really possible to get a great deal at one of these auctions. I wanted to experience one for myself as hearing it from someone else doesn't include all the details. Details are good.  :-)

I don't totally understand all the possible circumstances a property would be auctioned off. I assume foreclosure but I wonder if bankruptcy could be related to some homes getting on this list.

Of all the properties auctioned off today, all properties except one were purchased by the lender that took action. These are the ones I assume were foreclosures. The one property not involving a lender was between two private individuals. The newspaper said it had something to do with a suit involving the division of property and to recover the costs of the sale. The commissioner stated the appraised value was $40,000. A bidder started the auction at $5,000. This property ended up selling for $19,600. Several bidders got involved. This property did not include a right of redemption.

One question I have is regarding the properties the lenders purchased. I assume these properties were foreclosures and that the proceeds of these properties go to the lender minus any legal fees. The lenders then sell the properties to recover their costs? These properties will likely be available or being sold by another agent in the near future?

 

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Rainer
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Erik Hitzelberger
RE/MAX Alliance - Louisville REALTOR-Luxury Homes - Louisville, KY
Louisville - Middletown Real Estate

Bill - You are correct. The properties will be sold as REO homes in the near future.  Some banks are faster than others at getting them onto the market. 

BTW - we have about 20 people that show up at the Bullitt County auction.  There are five investors who generally try to get any and all bargains.  Occassionally, a homeowner can get a good deal though.

Aug 25, 2008 10:48 PM #1
Rainer
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Bill Dunn
Elite Realty Group - Paducah, KY

I guess I forgot somewhere along the line about that portion of the foreclosure. I assume that when a home goes into foreclosure that the home goes to auction so anyone can purchase it. The lender, already having a stake in the home, purchases the home back even it if costs them more money. I assume they're willing to overpay $5,000 so they can get their $120,000 back when they sell the home?

Aug 26, 2008 08:22 AM #2
Anonymous
Anonymous
Foreclosure Paralegal

Hi Bill,

The Lender doesn't actually put forth money to purchase the home back. They generally start bidding at 2/3 of the Master Commissioner's appraisal amount (which is a lot less than what the lender is owed) and have the option to bid up to their Total Debt amount in the event there is competitive bidding in hopes that they can recover some of the amount that is owed on the property. But they do not always bid that high, sometimes they start at 2/3 and stop at 2/3, and if someone bids a dollar more that individual is the purchaser of the property. Whatever the purchase amount is, whether purchased back by the lender or by a 3rd Party, the amount is applied as a Credit to the Lender's Judgment against the borrower. The lenders usually always end up taking somewhat of loss and never recoup the total amount they are owed.  There are good deals to be found at the MC sales, but beware of disgruntled homeowners that may want to damage the property before the house goes to F/C sale. Any purchase is made "As Is"

Feb 11, 2009 08:30 PM #3
Anonymous
Anonymous
jimmy lee

Experts, I am trying to evaluate how much risk I will have to take as an invester. Before the master commissioner sale, the for sale list is available almost 1 months earlier. I wonder if I examine the property say, two weeks before the court date, and everything seems OK, does borrower still have a chance to get into the property and damage it after my examination? And also, is it possible I can get pemission to enter the property for a thorough inspection, instead of just scrolling around? Except the information released by court, can I find furthur information about the property from the lender or 3rd party?

Thanks

Jul 31, 2009 12:46 PM #4
Anonymous
Anonymous
Kevin Griesser

Jimmy Lee,

Investing in real estate nearly always requires some risk.  The borrower may still live in the house until after the foreclosure auction is completed, and they may even have to be evicted by the purchaser.  As far as more information about the property, you can research the county records (PVA, County Clerk, etc.) to find out when and for how much the home was purchased, liens against the property (mortgages, tax liens, mechanics' liens, etc.).  Purchasing foreclosure properties at the auction is the riskiest time during the process.  There are three phases during which you could purchase a property heading to foreclosure.  1) BEFORE THE AUCTION - find the homeowner and purchase the property from them (depending on the equity position, this may require a short sale).  2) AT THE AUCTION - bid at the courthouse steps.  3) AFTER THE AUCTION - find out who purchased the property at the auction (the bank or a 3rd party) and see if they will sell the property to you.

There are advantages and disadvantages to all 3, but generally speaking BEFORE & AFTER you should be able to access the property for an inspection because you will have made contact with the owner of the property, while that may not be the case with purchasing AT the auction.  WHENEVER you buy ANY property - do your homework, know what you are buying (it is possible to buy a property AT THE AUCTION that is being sold subject to other mortgages or liens - you need to know that kind of thing.  Keep asking the questions, and keep doing your research.  Foreclosures CAN be a tremendous opportunity, but like all real estate, if not done with careful planning, they can be a disaster.

Kevin Griesser, Real Estate Investor (also licensed REALTOR)

Oct 20, 2009 08:59 AM #5
Anonymous
Anonymous
Matthew Harris

Are the properties for the McCracken County Master Commissioner's Sale listed online or are they only done at the "courthouse steps"?

Jun 21, 2010 07:41 PM #6
Rainer
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Bill Dunn
Elite Realty Group - Paducah, KY

Only at the courthouse steps.

Jun 21, 2010 07:52 PM #7
Anonymous
Anonymous
Barbara

I am interested in bidding on property at a Master Commissioner sale.  I have never done this. I read that I could purchase the property from the owner, even though it is in forcloser. Is that true?

Feb 04, 2013 07:18 PM #8
Rainer
22,845
Bill Dunn
Elite Realty Group - Paducah, KY

You may be able to purchase the property from the owner if time permits. However, it is unlikely you'd want to pay the amount required to obtain the property.

Feb 04, 2013 07:28 PM #9
Anonymous
Anonymous
Barbara

How would I know what the amount was? Would it have to be the amount owed to the bank or whatever amount the owner and I settled on? 

Feb 04, 2013 08:30 PM #10
Rainer
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Bill Dunn
Elite Realty Group - Paducah, KY

The amount would depend on the owner and the lender. You'd have to discuss it with the owner.

Feb 05, 2013 05:53 AM #11
Anonymous
Anonymous
Barbara

There are two names listed as defendants. What does that mean? One of them has the deed for the property. Why would another party be listed that doesn't have a deed?

Feb 05, 2013 06:48 AM #12
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Bill Dunn

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