If you’re considering purchasing a foreclosed property, it is important to familiarize yourself with the foreclosure auction process. These processes will vary from location to location, but this article can help you identify the type of information you should investigate before you participate in a foreclosed property auction.
- Where Are Foreclosure Auctions Held?
- How Do I Find Out When a Foreclosure Auction Is Taking Place?
- How Do I Attend a Foreclosure Auction?
- How Much Will the Foreclosed Property Cost?
- How Should I Decide How Much to Bid?
- What Are the Bidding Procedures?
- When Will I Have to Pay If I Win the Auction?
- Should I Hire Professional Assistance?
Foreclosure auctions can be held in a variety of places. Most commonly they will be held at:
- A designated public location
- A courthouse
- The location of the foreclosed property
Foreclosure auctions can be found in a variety of places, including:
- Local newspapers
- Real estate websites, such as RealTrac.com
- Through independent realtors
- Through the real estate commission or county trustee
In order to attend a real estate foreclosure auction, you must often register in advance. Depending on the auction, they may require registration between 24 hours to a few weeks in advance. Check the foreclosure auction listing to learn how to register.
The bank auctioning the property will set a minimum-bidding price. This amount will be based on the principal currently owed on the property, as well as any taxes, interest, or late fees that have accumulated on the property. The property will then be sold to the highest bidder who bids above the minimum price set by the bank.
However, properties sometimes come with hidden costs. If there are any additional mortgages or liens on the property, you may become responsible for those debts if you purchase the property. It is important to check with the County Recorder’s office to determine whether a property is subject to any additional debts.
Prior to submitting any bids on a real estate property, you should educate yourself on the current real estate market and determine the value of the property on which you are bidding.
Further, as mentioned above, make sure you check the property’s public records to determine whether there are any additional mortgages, liens, encumbrances, or issues with the property’s condition that might affect your bidding decision.
The bidding procedures will vary state by state, so it is important to familiarize yourself with local bidding procedures by attending a few foreclosure auctions. Some may have live or silent bidding.
Additionally, some foreclosure auctions will require that successful bidders have all of, or a percentage of, the cash (or cashiers check) with them at the time of the bidding.
The winning bidder will generally be required to submit certified funds immediately, or within 24 hours, of winning the auction. Thus, unless you have sufficient cash, you will need to secure funding through a bank ahead of time.
It is highly recommended that you hire a real estate attorney or real estate agent experienced in foreclosure purchases. This investment can significantly help you find the right property and smoothly navigate the purchase while avoiding potential costly mistakes.