Re: Auctions can be thrilling.
Last week I told you about the 465 properties that were going to auction around the state of Maryland.
That is 465 opportunities for you to “steal” a property – right?
Not so fast. There may be 2 types of issues that you can’t see from that online auction listing.
The first problem that most people anticipate – is that there may be defects in the property. There may be frozen pipes, mold, or more likely you will find an aged home in need of some basic TLC.
The second problem – title defects – are the type that can clean out an amateur and send them running back to their day job.
What are “Title Defects”?
My definition of a title defect is “anything you didn’t know” about the title prior to purchasing.
Was there an easement on the property that wasn’t obvious when you drove by quickly to take a look?
Does the property have likely issues with relatives or heirs that may come out of nowhere claiming a fraudulent sale of the estate property?
Or more than likely – will you find regular liens from contractors or builders that have never been cleared? These are particularly nasty because they can pop up even after a sale takes place.
Most of the real horror stories when it comes to auctions are rare. BUT – they can and do wipe out new investors every day. It can get much worse than just losing a deposit, some of these problems can persist long after a title transfer takes place.
Rare? Yes, – but these risks are part of the business and you should be aware of some of the issues.
More importantly – there are things you can do to GREATLY reduce the risk of problems after you win the auction bid.
And THAT is what we will be discussing at the WREIA meeting this month.
It can be thrilling to win a property at a good price at an auction. What we want you to avoid is that nightmare’ish situation that pops up after you hear the auctioneer say “Sold!”
If you are prepared for the worst case scenario, when you walk into the property and find out there are no issues and the property can be turned into a rental or be ready for sale within a week – it’s like hitting a home run! At the very least, everyone at WREIA will give you a round of applause!
If you want to learn from professionals who make a living in the Auction process, IN THE DC AREA, join us at our WREIA meeting this month.
The March WREIA meeting is
Monday, March 19th, in Bethesda.
Here are some quick details –
The March WREIA topic is obviously ” Auctions ”
Join us and learn:
Why auctions work so well in real estate
Main places to “view” auctions in 2018 – live and online
Can you really do this in your PJ’s?
Beware of these “speed bumps”
When auctions go bad – a few stories you can learn from and avoid
and more.
Join us as we talk about Auctions in the DC area.
Meet real people doing real deals in real estate – right here in the DC/Baltimore area.
Reserve your seat at this link.
Have a great weekend!
John Peterson
Founder, Washington Real Estate Investors Association
