Home buyers with enough resources should sample foreclosed homes for auction as these homes can be purchased for only a fraction of their fair market value. Especially if you need a new home quickly, auctions is the way to go. These homes get transferred quickly to the buyer after the auction.
Types of Home Auctions
Both banks and the government offer foreclosed homes for auction. Government foreclosures are sold through silent auctions where buyers would need to be represented by government accredited real estate brokers or agents. But government auctions give priority to owner-occupiers who would face difficulties if they attempt to purchase foreclosed homes by other means. The government's goal is to enable middle- to low-income families to become home owners. They also offer other grants and incentives to encourage these buyers. These grants can be applied to either the down payment or the closing costs.
Bank auctions are announced in newspapers and held at the steps of the court house or in some other public venue. The homes offered here are sold as is and buyers do not get a chance to conduct a formal home inspection. But buyers do have ample time to research the property prior to the auction. They should use this time to drive up to the home to survey its exterior and speak to neighbors to gain insights on the general area and even the occupants of the foreclosed home.
On the average, homes sold at auctions are discounted by up to 40 percent of the actual price of the property. It offers a lot of profit potential for house flippers. After undertaking the repairs, the new owners can sell the property at its fair market value or they can rent it out for a steadier flow of income. Indeed foreclosed homes for auction can yield good returns either for buyers who plan to live in the property or investors who want to profit from them.