When a lender has foreclosed a home, the only way to make back the money they lost through the foreclosure is by re-selling the home. Foreclosure auctions are the first place people go to buy foreclosed homes.
The first step in buying a foreclosed home is to look up foreclosure auctions in your area. You can do this by performing a Google search. Some websites, such as ushomeauction.com, will send you e-mail alerts every time there is going to be an auction in your area. Once you’ve found an auction, you need to get what is called a “bidder’s package,” which is a package of information about the property that is going to be auctioned off. It should mention any issues with the property, including things that need repair and an estimate on what these repairs should cost. You should be aware that all foreclosure auction sales are final.
It’s always a good idea to get the packet early so you can take some time to drive by the property. Not only does this give you a real life understanding of the property’s condition, but you might also be able to obtain some useful information from neighbors. If you’re able to, take a professional inspector with you. He can offer a more in-depth description of the property’s value, as well as the repairs that are necessary. It couldn’t hurt to ask the property owner to meet you there where you can discuss an offer. You never know if they will take your offer, but if they don’t, you still have a shot at the auction, right?
You might want to stop by your county courthouse to find out whether or not the title is clear. This is important because any property you purchase could have an outstanding lien that you would then be responsible for.
Before you can attend an auction, there are certain items that you will need to have with you. Most auctions require a photo ID, a cashier’s check (made out to yourself) for $5,000 to put as a deposit in the event that you win the property, and a personal check or cash for the remaining cost of the property. It’s always best to contact an authority who is in charge of the auction in your area to double-check the items that you need to bring.
The rest of the auction is pretty simple. You check in, get assigned a bidding number and card, and then wait for the auction to start. Any time to want to bid, simply raise your card. If you are the winning bidder, you’ll be asked to hand over your deposit to the closing agent, then just follow any instructions given to you at the time.
Good luck!
