subject: Foreclosure Auction: Tips for Buying Houses at Discounted Prices [print this page] A foreclosure auction is the last phase of the foreclosure process. Once banks have issued a notice of default and obtained court permission to repossess the property, they can sell real estate through public auction to clear the outstanding mortgage loan from their books.
Foreclosure auction attendees submit bids on properties they want to purchase. Oftentimes, bidders compete with multiple buyers to purchase foreclosed real estate. Some auctions require bids to be acknowledged by the auctioneer, while others are silent and bids are placed prior to the sale.
In both auction scenarios the highest bidder wins as long as they meet or exceed the reserve price. When submitting bids at foreclosure auctions it is best to offer the highest amount in order to improve chances of placing the highest bid. It is wise to establish a maximum price in order to prevent over bidding; especially when multiple buyers compete for the same property.
Bidding on foreclosure homes can be intimidating for those who have never attended a public auction. When possible, it is a good idea to attend one or two auctions to become familiar with the process. If auctions are being held online, buyers are usually required to place bids and increase the value as competitors submit their bids.
The policies of foreclosure auctions generally stem from the auction company hosting the sale. Bidders can obtain a copy of policies by contacting the auctioneer directly or through the lenders listing foreclosure homes for sale.
Prior to attending public auctions, buyers must determine if they are required to pre-register or if they must pay a fee to attend. Some auctions require bidders to provide down payment funds to hold properties once winning bids have been placed. Others require bidders to make full payment before leaving the auction. Nearly all auctions require payment in full within 24 hours of bid acceptance.
Public foreclosure auctions can take place in a variety of locations. Auctions are often held in local courthouses or at the property location. When mortgage lenders sell multiple foreclosure homes at one time they usually hold auctions at public venues that can accommodate numerous people.
Individuals can locate upcoming public auctions by conducting research online or via the Classifieds section of local newspapers. Individuals can contact their states' real estate commission or county Trustee to obtain a current listing of foreclosure sales.
Foreclosure home prices are determined based on the balance due on the original mortgage loan. When foreclosed homeowners carry more than one mortgage, or if tax liens or creditor judgments are in place, buyers are responsible for paying outstanding debts before they can take possession of the property.
Buyers must take time to research public records to determine what expenses are attached to the property. Property records are available through the county Trustee and can often be obtained online.
Buyers should also obtain comparable sales reports to determine the current market value of foreclosure properties sold through auction. Comp sales reports can be obtained through local realtors or via real estate websites such as Realtor.com. Conducting research allows auction attendees the opportunity to determine if real estate prices are actually a good deal.
When buyers win auction bids they must obtain property transfer documents and submit final payment. The amount of time required to transfer property records depends on the state where the foreclosure real estate is located.
Some states allow immediate property transfers while others require court confirmation of the sale. Some states provide a redemption period which gives foreclosed property owners the option to buy their house back from the winning bidder.
Buying real estate through foreclosure auctions can be rewarding and profitable as long as buyers understand the process and policies involved. If necessary, consult with a foreclosure specialist or real estate lawyer to ensure the foreclosure sale is properly transferred and recorded.
Foreclosure Auction: Tips for Buying Houses at Discounted Prices
