Rezults Realty, Janine Ayres, Las Vegas Trustee Sale Representation

Trustee Sale FAQ

Trustee Sale FAQ

Trustee Sale FAQ

What is a trustee sale?

A Foreclosure Sale conducted by a trustee under the stipulation of a Deed of Trust.  When a deed of trust is exercised, a specific trustee is designated.  Upon default, the trustee is authorized to foreclose the note and put the property up for a trustee’s sale.  The proceeds of the sale are distributed by the trustee according to the priorities listed in the deed of trust.

What is the foreclosure timeline in Nevada?

Default Period – No timeframe

Notice of Default (NOD) – Day 1 of foreclosure process

Reinstatement Period – Day 2 thru Day 35 after NOD

Redemption Period – Day 36 thru Day 90 after NOD

Publication Period – Day 91 thru Day 111 after NOD

Trustee Sale Date – Day 111 – can be postponed three times.  Then the sale must be restarted at Publication period.

Where is the trustee sale located in Clark County Nevada?

Nevada Legal News parking lot @ 930 S. Fourth St., Las Vegas, NV  89101.  In the rain, wind, snow, scorching heat or icy cold.  No seating provided. 

What do I need to buy at the trustee sale?

  1. Cashier checks up to the maximum bid amount
  2.  Authority to sign endorse the cashier checks over to the trustee (Limited Power of Attorney if not in your name)
  3. Copy of drivers license(s) (Bidder and person whose name the cashier checks are made out to)
  4. Pre-sale due diligence work including property information, market value and foreclosing lien position
What do I need to do before the sale?
  1. Obtain a list or develop a list of the properties going to sale on the day you will be attending
  2. Obtain property information for each property (lot size, living sq ft, garage sq ft, bedrooms, baths, number of levels, building type, year built, roof type, number of fireplaces, pool and spa, area, subdivision name, etc…)
  3. Research foreclosing lien position….
  4. Research additional liens and outstanding taxes…
  5. Evaluate and determine fair market value.
  6. Determine your max bid.
  7. Drive by the property to determine occupancy and condition.

Can I view the inside of the house prior to the sale?

Unfortunately not.  The property is still in the borrowers possession and that borrower still has all rights of possession. 

Why is the foreclosing lien position so important?

We want to buy the FIRST lien or loan on the property.  All junior liens, such as second loans, mechanic liens, home equity line loans, etc… are notified of the foreclosure of the senior lien (the FIRST lien) and have the opportunity to redeem the senior lien’s past due charges in order to save their security.  This does not often happen in an over-leveraged market such as Las Vegas is today. 

If the lien purchased is a second, the first lien remains in place and is still due.  This may totally wipe out any equity or keep the property in an over-leveraged position.  If the first lien does not get it’s scheduled payments, it can foreclose and all the funds paid for the second are wiped out and lost.

There are other liens that will have to be dealt with such as the homeowner association “super-priority” liens, utility liens and past due Clark County property taxes.

What liens do not get wiped off when you purchase at the trustee sale?

  •  Any past due property taxes, if applicable, will become the new owner’s responsibility.
  • Any utility lien such as garbage collection and sewer, if applicable, will become the new owner’s responsibility.
  • Up to 9 months of past due monthly HOA assessments will become the new owner’s responsibility.  Additional account transfer costs will be charged to the new owner also.
  • Special and/or Local Improvement District liens, if applicable – these are paid in installments twice a year over 10 to 15 years.  Often these get prorated when you resell to the next owner.
  • City or County public nuisance code enforcement abatement fees, if applicable.

What about a Federal Tax Lien?

IRS liens have a 120 day right of redemption.  That means they have the right to take the house in lieu of their lien.  This may happen if there was equity.  If they do redeem their lien, they pay you back what you paid for the property.  But, today the properties going the trustee sale do not have equity.  The problem beyond that is the 120 day wait for that right of redemption to expire.  You don’t want to expend money on the property until you know that the right has either expired or has been released.  You can request the IRS to release its’ right to redeem property secured by a federal tax lien by following the instructions in Form 487.

Are there only houses being sold at the trustee sale?

Not at all!!  Anything with a loan can be foreclosed upon.  We see vacant land, condos, townhomes, highrise units, apartment complexes, duplex, triplex, fourplex, commercial including retail, industrial, office, and hotel / motel  properties go thru the sale.

Why should I buy at the trustee sale?

The biggest reason to purchase at the trustee sale is the reduced purchase price.  It is very hard to get a “deal” on the MLS (Multiple Listing Service) – especially if you are interested in “flipping” the property.  A quick timeframe for acquisition is another reason.

What day and how often is the trustee sale auction on?

Every weekday except bank holidays.  All sales must be called between the times of 9am and 5pm.

How many trustee sales are there?

Lots!!  Please see the trustee sale statistics for the numbers.  It is organized by month – It contains the number of sales called – how many were postponed, cancelled, sold with no bids and revert back to the beneficiary and sold to private parties.

What happens if I am the winning bidder?

You will fill out a slip for the auction agent with the vesting information (how you wish to hold title) and endorse the cashier checks to pay for the full amount of your bid.  If you have to pay over your final bid, the trustee will issue you a refund check for the overpayment (usually within a week).  You will be given a trustee sale receipt. Within 20 calendar days the trustee will mail a trustee deed to your noted mailing address.  It is your responsibility to record the trustee deed within 10 days of receiving it.

What do I do after I purchase a property?

If occupied, initiate eviction or negotiate a Cash for Keys agreement or negotiate a new lease (if you want to hold and rent the property).  If vacant, change the locks, post no trespassing signs, evaluate property rehab needs, and evaluate exit strategy (buy and hold, flip, wholesale).  Be sure to place hazard insurance and turn on all utilities.

Can I get title insurance on the property?

Yes – with the right title company – you can get title insurance with the trustee sale receipt.  Other title companies will only write it after you have recorded the trustee deed. 

If I want to flip a property, what is the best approach to rehab?

It depends on the resale market.  We’ve experienced markets that demand a top notch rehab in order to get top dollar and the market supports the investment and gives a good return for the work.  We have also experienced a market that does not pay back any rehab investment, so rehab must be kept to a minimum in order to get a decent return on your investment.

Do lenders have issues with financing “flip” properties?

Yes, but they and the government insurance entities see the need to make these properties available to their potential borrowers and have instituted additional requirements for “flip” properties.  They may add extra hoops for the buyer and seller to jump thru, but it is common for the buyer to be successful in purchasing a “flip” property.  A key is using a lender familiar with financing “flip” properties and developing a relationship with them in order to make them your preferred lender.

Do I have to be a real estate licensee to buy at the auction?

No.  The trustee sale auction is a public auction.  The only time a licensee must be involved is if they are facilitating the purchase of property at the sale for another for a fee or commission.  In that case, this meets the conditions of NRS 645 (Nevada Revised Statutes) of conducting the business of real estate, which requires a license.

 
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