How Foreclosed Houses Auctions Work

How Foreclosed Houses Auctions Work

How Foreclosed Houses Auctions Work

Before deciding to buy a residential property through foreclosed houses auctions, investors and private home buyers should be aware that there are certain preparations they need to do first. This way, they can be assured that they will not be wasting their time attending an auction only to find that they are not qualified to do so.

Preparing the Money

It is always necessary for homebuyers who wish to bid for a property at an auction to attend the event armed with the amount that will be required from them should they win the bidding contest. In some areas of the U.S., a buyer is not allowed to bid unless he can prove that he has the complete purchase amount for the property either in cash or in cashier's checks.

Although some states do allow bidders to join the auction with only ten percent of the purchase price in his pockets, the winning bidder would still have to shell out the down payment at the same day that the auction ends. In addition, auction house fees and other extra expenses are usually required from the winning bidder the same day he is declared the winner.

Assurance of Ownership

Unlike other ways of purchasing homes, buying through foreclosed houses auctions assures the buyer that the property is his the moment he is declared as the winning bidder. Even if other offers are made, the seller is legally bound not to accept them even though they can be much better than the bid of the winning buyer.

Of course, a winning bidder should complete the payment within the pre-determined period specified by auction organizers. In most U.S. areas, 90 days is the standard period by which the winning bidder is required to come up with the full price for the property he won at the auction.

Acquiring a residential property from foreclosed houses auctions helps eliminate worries over other competitors. However, a buyer should have the necessary amount and paperwork ready before attending the auction and making a bid on any of the properties that are being sold.

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