How to Become a Bidder: A Q&A With Jane Seebold
Jane Seebold, One House At A Time’s Program Manager, has been the guru of receivership bidder applications since 2013. Her work, guiding qualified applicants to become bidders, leads to the restoration of vacant homes in Baltimore as those capable bidders buy and rehab properties. Some prospective applicants feel lost on what it takes to become a bidder. So, we spoke to Jane about her application review process to gain insight and demystify our requirements. Here’s what she had to share:
What should prospective applicants know before they apply?
Well, they should know that the main criteria we look at is that they have access to funds and that they have rehab experience or are working with a contractor who does. The vacant properties that we're transferring for the District Court are in very bad shape. So, in order to qualify, applicants must show that they have the ability to both purchase and rehab them in a timely manner. The court doesn't want us to transfer properties to someone who doesn't have the ability, because then they could just stay vacant and that defeats the purpose.
Another criterion is that if property is owned in Baltimore City, it must be in good standing. You can't have official vacant building notices on other properties. If they're being rehabbed and have open permits, then that's fine. But it can't be a property with citations and violations that are not being addressed.
What are some misconceptions people have about this process?
It's funny, people either have the misconception that all they need to do is send us an email that they want to participate, or they have a sense that it's an onerous process and difficult to get through. Both of those things are not true. We're happy to walk people through the process…to let them know what else is needed once they submit documents. It's important that they understand the responsibilities of a receivership process…but we don't just leave you in the dark.
There are ways to meet the criteria without having money in your bank and having done a rehab exactly like the ones we have. So, there are nuances to the process we are happy to discuss. For instance, the requirement for financial assets is that you should have access to at least $90,000. That can include bank accounts, lines of credit, retirement accounts, equity in properties that you own. We also accept funding from some hard money lenders as long as there are no contingencies on the money being available to you. In addition, it's also possible to get private investors, like family members or people in the community who want to pull together $90,000 to support a project that eliminates a vacant property on the block. So, it can be one person doing one house at a time, literally, or you can be a developer or nonprofit organization doing multiple houses.
Where do some people go wrong in their applications?
Probably the most frequent thing is when people get a loan commitment from a bank that is a preapproval or conditional commitment to lend. We can't accept anything that is not a firm commitment to lend upfront because when we sell properties at public auction, we have to know at the time someone signs a contract of sale that the money is going to be available to them at settlement, regardless of the condition of the property purchased.
Having your research done is also important. I think people just don't understand the condition of the properties that we're dealing with. They need to do research about the neighborhoods, what the market will bear in terms of the money that they can get. That's why we always give [approved bidders] access to the properties in advance. They can even have engineers come in, see if there's structural work that needs to be done so they have a sense of how much investment will be required to get it up to code.
How do you process the applications?
I get a couple of applications a week. But when it gets close to an auction and an auction deadline, I get several, probably 50 or 60. My process is to review them in the order that they come in, and then get back to the people as soon as possible to let them know what else is needed. It's rare that someone has everything all at once.
Then I go through and work with the person until hopefully they get approved. Sometimes people decide, ‘Well, I'm not ready yet. I'll do it in a future auction,’ or ‘I'm going to observe this auction and come back later or do more homework.’ But the key is…if they have the ability [to rehab] and can demonstrate it in some way, then we want to work with them to assist them in that.
Do you have any tips for applicants?
Be sure to do your research so you know comps in the neighborhood. What else has sold? What else is vacant? You can look at city-data. CodeMap shows city properties and the status of properties around them. The University of Baltimore has the Baltimore Neighborhood Indicators Alliance. Live Baltimore has information about the neighborhoods. Go to the property. Look around.
Equally important is getting your paperwork in order. The more you submit initially, the less time it will take.
Keep in mind that it doesn't matter whether you want one house or five houses. It really is one house at a time, so don't feel like you're too small. We've had situations when someone lives on a block where there's a vacant and the neighbors have gotten together and backed [a contractor] to buy that house and they can fix it up…There's nobody too big or too small.
For more information on our bidder application process and requirements go to our Become a Bidder page. You can apply online or fill out our PDF bidder application form. If applying with the PDF, once you complete the form, send it, along with your supplemental documents, to Jane at [email protected].
