Valuable Pointers When Acquiring A Property At Auction

Valuable Pointers When Acquiring A Property At Auction

How do you go about shopping for a foreclosure home at public sale is a question I hear fairly often. Well I'm not an lawyer and the process is different from state to state however I may give you some general pointers. Let me begin by saying there are actually two sorts of auctions. The first type is the "court house steps" public sale, this public sale is held before the bank takes the home back. The second kind of auction are those you see marketed on TV, newspapers, etc. At these auctions the lender has by now foreclosed on the property. Lets check out each type.

The first type of foreclosure auction is frequently referred to as the "court house steps" sale. Now in lots of instances this sale isn't really held on the court house steps but inside the court house building or many occasions in an attorneys office. However places such as Phoenix, AZ truly do have these auctions outside the court house every week. The biggest threat buying at this auction is you normally haven't been in a position to examine the home and/or if you're the successful bidder you may be the one doing the eviction of the current owner. Not a very nice process. If no one hits the reserve bid that is when the lender is the high bidder and actually takes the home back. As soon as this happens they are going to promote the house in one of two methods, either by way of a brokerage/listing agent through the MLS or via a second kind of auction.

The second type of public sale is the kind you see marketed on TV, newspapers, radio, etc. These houses have already been taken back by the lender as in the instance above. The benefit of acquiring property at such a auction is your not doing any evictions and typically you'll be able to examine the property. The largest down side to that is there are usually many bidders on a particular home. Many of these bidders are inexperienced and within the "heat of the moment" many of those properties get bid up and purchased for greater than they're actually worth. You also have to have cash (or hard money lender which is a whole new subject).

The main factor to remember when buying at both kind of auction is do your homework. Many individuals go in blindly and buy a property only to realize they didn't get a great deal. As with anything those who do there "due diligence" and put in the effort are those who get the nice deals. Bear in mind that this process does require a good period of time if you wish to be profitable. If you can't commit the time to purchasing property in this way you in all probability shouldn't.

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