Las Vegas Trustee sale auction is where the act of foreclosure takes place
Nevada State Law requires lenders who are foreclosing on properties to run them at a Las Vegas foreclosure auction called the Las Vegas Trustee Sale Auction.
The lender can’t bid more than the foreclosing loan and if a third party bids one dollar more than the loan amount, the bank is out and only other third parties can bid against the original bidder, the auction becomes absolute at that point and will be sold to the highest bidder.
The second or third mortgages get wiped out but other superior liens like tax liens, HOA, trash or mechanical liens do not get wiped out, transfer with the property and can run thousands of dollars.
However, sometimes banks will sell the property for far less than the foreclosing loan amount or comparable properties to avoid two closing costs Realtor commissions and repair costs. At this point, the buyer has to meet a minimum reserve price by the lender to win the property.
How are the sales divided?
About 30%-40% of homes, condos or high-rise units sold through the Las Vegas Trustee Sale Auction are purchased by a third party at discount from retail prices. The rest go back to the lender to be sold as foreclosure listings in the MLS or sold in Las Vegas foreclosure auctions as bank owned homes or condos.
Those who want to flip homes or condos could look forward to an 8%-10% net profit per real estate deal which, if done correctly 3-4 times per year, can provide for a 30%-40% profit per year.
There are not many investment opportunities that allow for this kind of profit per year. However, extreme care should be exercised when buying, since liens for back taxes, back HOA fees, and some service fees like trash collection fees come with the property and have to be researched before bidding.
How to achieve success at Las Vegas foreclosure auctions
As we discussed in Greater Las Vegas real estate auctions buyer’s guide success in these auctions depend on first finding the right property and doing all prior preparations and then having the right strategy to bid on them.
The Trustee Sale Auction only furnishes the parcel number and the address for the property plus the foreclosing loan amount.
The address has to be converted to information, for example, 555 Rainbow Boulevard has to be converted to a 1990 built three bedroom home with two baths and 5500 square foot yard. Then a comprehensive market analysis (COMP) has to be done to figure out how much comparable homes are selling for through the Las Vegas MLS to figure out the price difference before one bid on a property.
Once the buyer or agent knows all the right information on a property they then wait until the property that matches the buyer’s criteria hits the auction and then bid.
The biggest problem in bidding at the Las Vegas Trustee Sale Auction is postponements and cancellations which are NOT announced at the beginning of the auction. So the bidder has to stay until the end of the auction to make sure that his/her desired listing didn’t run because some listings that are postponed may run later with no prior notice.
At least Auction dot com announces their postponements and cancellations at the beginning of their Las Vegas foreclosure auctions and those listing will not be run if you leave the auction.
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