subject: Preparing For Home Foreclosure Auctions [print this page] For homebuyers who plan on acquiring a property through home foreclosure auctions, the job is not as easy they might initially think; there are certain protocols that should be observed and potential pitfalls they should watch out for to prevent them from getting the raw end of the deal.
Bidding Concerns
The atmosphere in a property auction can get very exciting like in a sports competition where one team or individual tries to get one over the other. For first time bidders, the excitement can cause them to commit the most common mistake overbidding.
If a homebuyer is new at bidding, he can get carried away by the high strung atmosphere common in auction venues and end up offering a bid amount that he does not have just to win the contest. Buyers should remember that the winning bidder is obligated to pay the deposit, usually ten percent of the total price, the moment they are declared the winner.
If the buyer fails to come up with the amount of the bid within the given period of time, he will lose the property he won and also his deposit. Auctioneers usually provide the winning bidder a 90-day period to come up with the whole purchase amount.
Property Concerns
Sometimes, homebuyers will not have enough time to inspect properties sold at home foreclosure auctions. Most of these properties are auctioned off at short notice and buyers will have to rely on the sale package distributed to bidders that describes the property being auctioned.
In addition, deposits for the property should be paid in cash or check immediately after the bidding has ended. Extra costs like auction house fees and agent dues should also be paid right after the auction itself, which means that the winning bidder should have enough money with him to cover these costs before he attends the auction.
There are a lot of good deals that can be had at home foreclosure auctions. However, unless the buyer has inspected the property thoroughly before the actual auction date and unless he has enough money to cover all the immediate costs, buying a home at an auction might not be a very good idea.
