Purchasing a property at a trustee sale, or auction, represents one of the best ways for sophisticated investors to acquire equity in real estate. In this article we will discuss what to look for when using a bidding service to assist you in purchasing a property.

To begin, trustee sale auctions happen every weekday, and most are held at the steps of the County Courthouse. Some are held outside the offices of the Trustee.

Many who choose to purchase a trustee sale opt to go with a bidding service. The reason being is that there is a massive amount of data to sift through, and allowing a bidding service to perform the preliminary market research can save you a lot of time. This market research usually highlights the properties with the most potential for return on investment.

The tips below should help you get acquainted with choosing a bidding service that meets your needs, and makes you feel more comfortable with making a purchase at a Trustee Sale.

 

Choose a service that updates its list daily Auctions are dynamic. You may want to bid on a property that is a great deal right now, only to find a few hours later it has been postponed. Similarly, you may find a property that was a bad deal an hour ago, but now the opening bid dropped to make it a profitable property. On the flip side, the reverse may happen and the bid may jump. Jump bids are tricky in that they can jump a little and the property can still be profitable, or it may jump up a ridiculous amount making it much less enticing. Having an up-to-date list is key in making smart bidding decisions. Choose a service that notifies you of drop/jump bids This tip compliments the one above it. A drop bid is when a trustee releases/lowers the opening bid amount for a property a short time before the auctioning of it. Conversely, a jump bid is when a trustee raises the opening bid amount for the property a short time before the auction. The key thing to note is to make sure your bidding company notifies you of the jump/drop bids, if and only if, they are for profitable properties. You only want to receive notifications for the profitable properties. There are a lot of properties that get auctioned off in a day and a lot of information to sift through. Would you really want to be notified about a drop bid for a property that you would loose $200K on? But if you could make $200K on a property that just got a drop bid, you definitely want to be notified. This goes hand-in-hand with having an up-to-date auction list. Take your time Auctions happen everyday, Monday – Friday, excluding holidays. You can find great deals almost everyday. Make sure you take the time and find a property that you feel comfortable purchasing. The advantage of purchasing at auction over a traditional home purchase is that you can own the property by the next business day. On the flip side though, you need hard money to purchase a property at auction, although many who purchase do go through a hard money lender. Take your time though, it is a lot of money to invest, and when you do make a purchase you should feel secure and happy that you made the right decision. Never let a bidder pressure you. Make sure you can get a hold of your bidding company Let’s say you find a great deal last minute you want to bid on; you want to make sure you can get a hold of your bidding service. If you change your mind last minute about bidding on a property; you want to make sure you can get a hold of your bidding service. Bottom line, choose a respectable, responsible, and responsive bidding company. Always verify the research yourself. This is most likely the most important tip of all. There is no doubt you can find some great deals at a trustee sale. However, when reviewing an auction list provided to you make sure you double-check the profit margins and verify the math yourself for every property you plan to bid on. Also, be sure to view the property before purchasing it. Seeing the property for yourself is the best route to go, however, it is not always the most feasible. There are many ways to view a property, Google maps, recent photos, or contacting a Realtor to show you the property. ]]>

 

Pero Matic
AZ Trustee Sales
http://az-trustee-sales.com

Originally published here.

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Pero Matic

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Your will specifies how you would like your assets to be managed after your death. It outlines who will receive benefits from each of your assets — including land, possessions and investments. In your will you also nominate guardians for your children and outline your wishes for your funeral.

The Executor and Trustee

When you create a will, you nominate a person as the executor and trustee of your estate. This person is responsible for ensuring the terms of the will are carried out and takes care of administration for different aspects of the will.

You can nominate a close friend or family member to act as your executor and trustee. Duties include distributing assets, holding assets in trust (if a beneficiary is underage, for example), selling assets, filing for probate, or dealing with anyone who wishes to contest the will.

Due to the complex and time-consuming nature of the job, many people now choose a professional executor and trustee. Using an independent trustee such as Smith and Partners offers several benefits:

An independent trustee is impartial. With no vested interest in the distribution of assets, an independent trustee can manage conflicts between beneficiaries, especially during such a difficult time. An independent trustee understands the legal and administrative process of dealing with your estate. They ensure the distribution of assets goes as quickly and smoothly as possible. A firmly established trustee company will be there when you need them; unlike a relative or friend who’s circumstances might change. The independent trustee ensure all details of the will remain confidential and that beneficiaries receive the correct information when and where it’s needed. A trustee company normally uses a secure facility to store wills and other important original documents. Trustee companies are given special privileges under law, allowing them to place a portion of assets on hand immediately to cover funeral costs and the personal needs of your family.

Whoever you choose as an executor and trustee, they must be someone you trust, and have the skills and experience to deal with the process.

Originally published here.

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Smith and Partners

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When a chapter 7 petition is filed, the U.S. trustee appoints a “disinterested” (that is, impartial) case trustee to administer the case and liquidate the debtor’s nonexempt assets.  Specifically, the trustee has the duty, under 11 U.S.C. §704(a)(1), to take possession of and sell all of the debtor’s property that is not exempt and use the sale proceeds to pay the unsecured creditors (that is, creditors who extended credit based only on an evaluation by the creditor of the debtor’s ability to pay, as opposed to secured creditors, whose extension of credit was based additionally on the creditor’s right to seize collateral on default).

 In most cases, however, the debtor has no assets above the statutory exemption limits (for example, the exemption limit for jewelry is $1,350; for household goods, furnishings, and appliances it’s $10,775), meaning that the debtor may “exempt”, and therefore keep, all of his assets.  If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors.

Most chapter 7 cases involving individual debtors are in fact “no asset” cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors.  A governmental unit, however, has 180 days from the date the case is filed to file a claim.

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In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim.

The filing of a bankruptcy case creates a “bankruptcy estate.” This bankruptcy estate technically becomes the temporary legal owner of all of the debtor’s property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. It is the trustee’s function to “administer” the estate by taking the debtor’s nonexempt property, if there is any, and liquidating it, and then using the funds to make payments to all creditors who have properly filed their proof of claim.

The primary role of a chapter 7 trustee in an “asset” case is to liquidate the debtor’s nonexempt assets in a manner that maximizes the return to the debtor’s unsecured creditors. The trustee accomplishes this by selling the debtor’s nonexempt property (along with any property having a value that exceeds the exemption claimed by the debtor on it) if it is free and clear of liens (or if it has a value that exceeds any security interest or lien attached to it).

The trustee may also attempt to recover money or property under the trustee’s “avoiding powers.” The trustee’s avoiding powers include the power to “avoid” (that is, set aside) “preference” payments (that is, payments to creditors within 90 days before the petition or to “insiders” made within 1 year prior to filing), to undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition, and to pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate.

Understanding the role of the trustee, as well as the extent of his or her powers under bankruptcy law, is key to a successful Chapter 7 filing (that is, one that results in a discharge and with the debtor keeping all or as many of his assets as possible).  It is vitally important to anticipate potential actions by the trustee and, wherever possible, to avoid the trouble those actions can precipitate for the debtor by proper planning before the Chapter 7 petition is filed.

Originally published here.

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David Romito

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