Coming to auctions of foreclosed homes unprepared is a definite recipe for disaster. The most important thing to bring with you is the knowledge about the home being auctioned off and your own budget of just how far you are willing to go in the bidding. Would-be participants should also be clear that they are buying a second hand home and are therefore inheriting all the benefits and perils that go with it.
Probably a limiting factor about foreclosed homes sold at auctions is the fact that prospective buyers are unable to conduct an official home inspection to reveal the extent of damages in the home and thereby assess the cost of repairs. The most that buyers can do is drive out to the property and survey its exterior, they could also talk to neighbors and ask about the home, its history and background and the people living in it. Most of the time though this is all that buyers may need to make a decision of participating in an auction.
Auctioneers are likewise under no obligation to disclose the title situation of the property being sold. But since property titles are public domain, buyers can simply check with the county courthouse and do their own title search. This task will unearth hidden taxes or liens on the property if there are any.
Auctions of foreclosed homes are the fastest way of owning a property because the winning bidder can move in to the home within a couple of weeks. One has to keep in mind though that all auctions are cash sales, so you have to have the funds to back up your bid. When you register to participate in an auction of foreclosed homes, you will be required to pay a fee that is equivalent to ten percent of the starting bid as earnest money.
Keeping Emotions in Check
During the actual bidding, keep your emotions in check as many buyers often find themselves biting off more than they can chew and end up with a less than ideal property that cost more than they are willing to pay.