Bailiff Auction

[HotRod]

Came across an interesting one the other day.

A bailiff auction.

Rang up and got some details.

Scary to tell the truth.

Apparently there's $150K in outstanding rates and mortgage that the successful bidder has the honour of paying IN ADDITION to the purchase price. Looking forward to someone on auction day getting caught out.

Poked my head around the property and noticed a sign next to the front door "A socio path lives here"

Asked the bailiff further and said that the property may not be inspected prior to auction and the tenants are the new owner's problem.

Sounds like a bit of a nut job who has not paid any rates or mortgage for years and is quite happy to squat.

Will go along next week and see what frivolity ensures.

I'm thinking one of three things will happen:

No-one will bid because of the nutjob
Someone will get a bargain even with the added costs and has a big cousin called Bubba
Someone will pay the FMV of the property not realising there's another $150K of goodness on top and then have fun in courts for 12 months trying to get the previous owner out

 

[Peterw]

I think that you will find out that the contract will reflect what the buyer will inherit, and that will also no doubt be read out by the auctioneer on the day. Looks like the buyer will be picking up a fair headache.

 

[Bats]

Have been to many baliff auctions in Perth and all the relevant facts are made clear to everyone and it is also disclosed in the Contract of Sale.

The issue of not being able to inspection prior to sale date is a pain, but I guess you have to work with the system and not against.

 

[Corey Batt]

Just more opportunities for profit presented, as it falls into the 'too hard' basket for others.

 

[mrdobalina]

Unfortunately there are reserve prices on these properties, which are not far off the market prices. Therefore the opportunities for arbitrage is limited, taking into account the increased risk of not being able to view the properties prior to the bailiff auction.

 

[westminster]

Interesting. How does one find Bailiff Auctions?
It's all very 'flipmen'

 

[cu@thetop]

Have a look to see who the creditor is pushing the sale.

Given the circumstance the debt and the rates also remain owing. The rates will be not negotiable but you may be able to come up with a deal with the bank if you promise to refinance with them- remembering if the Council sell it off the bank mortgage evaporates and they only get the leftovers.
The tenant will trash the place upon eviction but maybe they can be convinced to relocate- by hook or by crook- or even a bribe.

Ask the Bailiff what the appraisal says it is worth- the reserve will be no more than half of the equity.

Even if the reserve is not met here in Qld the Bailiff can pop his head into a Registrar or Magistrate and ask for a sanction to sell below reserve. Commonly the Bailiff may choose to immediately bid at the outset to the reserve price and let it go above there.

Turn up on the day and let us know what happens.

I agree that there is plenty of opportunity here. Buy it in a $2 company/trust structure and not individual names. You'll need finance good to go as well.

 

[pinkboy]

This is where a 'Dazz Forklift Eviction' is needed!

pinkboy

 

[Joe D]

These are more common than you would think and are advertised in the weekend papers.

The success rate is high ...... for the bailiff ...............(ie. the debt usually gets settled at the 11th hour as the extra pressure is put on the vendor and no sale proceeds).

Less successful for the bargain hunters as there is always a reserve plus not being able to view the property and having to provide a deposit and settle within 30 days means you need to have cash available. However, a bargain may be possible if persistent and you have the finances and inclination to pursue sales in all metro areas.

I have attended several bailiff auctions but only seen a couple of sales. A relatively recent one had the tenant (friend of owner) running out half dressed squawking to the owner on the phone whilst the auction was proceeding. The auction paused as it did not reach reserve and at the same time the owner screeched to a halt in her car and abused the Bailiff auctioneer.

In the end she settled her debt by credit card on the spot and the auction was cancelled with the under bidder walking away.

Had it not stalled at auction, she would have lost ownership of her property for the sake of a several thousand dollar outstanding debt.

 

[Truly Exotic]

Have attempted to buy at baliff auctions, tehy are quite fun, as they arent agents so you can see how uncomfortable some are!!

the pros are sometimes you can get a good deal,

the major cons for me are that , sometimes some people dont know that the arrears are liable by you, so you get outbid, or some know that the arrears are liable to you, but get psychologically carried away with the lower price

what sort of price range is your property that had $150k in arrears??? ouch ouch

 

[Joe D]

the major cons for me are that , sometimes some people dont know that the arrears are liable by you, so you get outbid, or some know that the arrears are liable to you, but get psychologically carried away with the lower price

what sort of price range is your property that had $150k in arrears??? ouch ouch

Agree.

The encumbrances are made known prior to auction. The encumbrances are payable by bidder. If the encumbrance is $10k on a $300k property then there is a high likelihood the auction won't proceed and the debt will be settled prior (but not always), however, if the debt is a higher percentage of the market value then it is more likely the debt won't be settled prior to auction and a higher possibility a sale may occur if the reserve is met.

If the auction is successful (for the buyer) then they will still most likely need to engage the bailiff thru the judicial system to evict the tenant to gain access.

 

[HotRod]

Well that was a buzz kill.

Three of us rocked up before 10am and tried to psych each other out, put each other off their games and suss each other out.

10am, no bailiff rocks up.

10.10am, still no one

10.15am, on the phone to the bailiff's office and told the owner had settled their debts in full, bummer.

Chatting to each other after that we were all on the mark with the highest price.

All agreed that $100K would have been the maximum bid (allowing for clearing the outstanding debts, stamps, eviction costs, reno etc) and we were all looking at a quick pump and dump.

Maybe next time.

 

[Bats]

You can always ring the Baliff's office on the morning of the auction to check if it is still going ahead.

I have seen a couple of bargains in the past 6 months.

 

[HotRod]

You can always ring the Baliff's office on the morning of the auction to check if it is still going ahead.

I have seen a couple of bargains in the past 6 months.

Was just around the corner from our place, so no harm done.

Should have realised something was afoot when I noticed a Sheriff's car in the area earlier in the morning.