Simulation: a fictional property for practice.
A Nevada foreclosure auction: what would you really owe?
A trustee’s sale with a $180,000 opening bid. Read the title report, find what survives the sale, and decide.
A fictional house at a trustee’s sale in Nevada. Lien rules differ by state and by kind of sale.
- Sale: Trustee’s sale for the first deed of trust, Nevada
- Opening bid: $180,000, cash or cashier’s check
- Value as-is (from comps): About $290,000
- Occupied?: Lights on and a car in the driveway
Mission 1: What survives the sale?
The title report lists these. Which could you still have to pay after you buy? Pick all that apply.
- First deed of trust being foreclosed: $184,000
- Second mortgage recorded after the first: $30,000
- Unpaid property taxes: $6,100
- Federal tax lien recorded after the first deed of trust: $18,500
What you bid isn’t what you pay. Add surviving liens to your costs, and have a title company or attorney confirm the list before the sale.
Mission 2: Someone lives there
The house looks occupied. What do you plan for?
- Change the locks the day I buy it
- Time and money for a legal process to take possession
- Nothing: the trustee hands over the keys
Plan for occupants: who they are decides how long it takes. Never contact or pressure a homeowner before the sale; deal with occupants only after you own it, through the legal process.
Mission 3: Your real cost
- Opening bid: $180,000
- Property taxes that survive: +$6,100
- Federal tax lien, until cleared: +$18,500
- Possession: legal costs and months of holding: +$5,000 to $10,000
- Repairs, unseen inside: +$25,000 to $50,000 (a guess: you can’t inspect)
- Real cost: About $235,000 to $265,000
- Value as-is: About $290,000
A $110,000 “discount” shrinks to $25,000 to $55,000 once you add what survives, possession and repairs you can’t see. And bidding usually goes above the opening bid. Set your walk-away price before the sale with the walk-away price calculator.
Would you bid at this sale?
Buy, investigate or pass? Work through the drill to see what an experienced investor would weigh.