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Investments - Foreclosures
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Foreclosure Property Auctions
If you're trying to get a home for less than market value, either to live in it, sell it or rent it, foreclosure property auctions are worth looking into. A foreclosure property auction can be exciting. You need to know what to expect when you attend a foreclosure auction whether it's your house up for auction or a house you're trying to get.Foreclosure bank owned properties are homes that the bank has taken possession of because the owner failed to make their mortgage payments. Banks are not in the real estate business, so they would like to get rid of the property soon as possible. That's why they may sell the property for less than market value. The banks are at least trying to break even on the deal and unlike an investor or homeowner, they are not trying to get as much money as possible out of the property. You will find information about foreclosure property auctions in the newspaper, internet or local flyers.
Before you attend an auction you should do as much research as you can on the property that you are interested in. You need to make sure there are no liens against the property. Know how much the property is valued for and what homes in the area have been sold for in recent times. If possible perform an inspection of the property with a person who is familiar with home repair. You'll need to have an estimate of the needed repairs so that you can incorporate that into your bid price. It also helps to be pre-qualified so you don't have to worry about putting down a deposit on the day of the auction.
To start the foreclosure property auction the auctioneer will usually read a legal description of the property and then start taking bids. If there are people making bids who are not prequalified the auctioneer will ask to see the deposit check. And as most auctions go, after each bid the auctioneer will try to get someone to raise the bid. If there are no higher bids forthcoming, the auction for that property is over it is sold to the highest bidder.
After the auction, a foreclosure deed and purchase papers are drawn up and validated. The new owner generally has 30 days after the auction to find financing. A person who is buying the property just to resell it quickly may already have a new buyer lined up before that 30 days is over. The original owner is allowed to bid on their home as long as they have the deposit needed and can get financing within the grace period. Sometimes the original owners can use the foreclosure property auction process to have more time to save their home. If they can accumulate the deposit and be the highest bidder they will have another 30 days to come up with new financing.