September 10, 2020
Instead of visiting the online websites of realtors or flipping through their brochures, place your focus on foreclosure properties. Foreclosure properties are often considered a great buy, as they are easy to find and affordable.
One of the most popular ways that foreclosures are bought and sold is at an auction. This auction typically takes place at a county, town, or village government office, such as the clerk’s department. As for how you can find these foreclosure auctions, they are often advertised in local newspapers. You can also search local records, as foreclosures are public notice.
One of the few downsides to buying a home at a foreclosure auction is the inspection, as you aren’t typically granted one. Most bidders are bidding on the home as-is. As-is isn’t so bad, but it may be if you haven’t seen the property. With that said, since foreclosures are public notice, you should be able to get the address of the property in question. You will want to drive by. Although you should not judge a book by its cover, a drive by can give you an idea of what to expect. When you have doubts, it may be best to move on and target other auctions.
If you decide to attend a foreclosure auction, the last thing you want to do is just show up. That is unless you are scouting to see how an auction works. When you are serious about purchasing a foreclosed property at an auction, you need to be prepared. This preparation involves having financing lined up. Many will require that you either have the money on hand or show proof that you do have the financial resources needed to follow through with the sale. Contingency loans are generally prohibited. Check deposits are sometimes required before you can even place a bid.
As for the auction itself, it depends. It is not uncommon for bids to be sealed. Once everyone has placed a bid, the highest bidder will be announced. For bids that are not sealed, the auctioneer will start with a figure, often around $1,000 or less and the bidding will continue on. If you are the winner bidder, it is important to know that you may not be able to move into your new home right away. In fact, it is likely that you will be unable to do so. Many states give current occupants a redemption period or a grace period. This is where they can still fight to keep their home. After this point has passed, you can start the eviction process if the current occupants do not leave voluntarily.
As it was previously stated, you may want to attend a foreclosure auction and just sit on the sidelines. You should be allowed to do so. If you are unfamiliar with the buying and selling of real estate, foreclosures, or auctions, you can learn a lot. This knowledge is important, as many fellow bidders will be investors looking to turn a profit, not buy their first home.