Homes that are going to be foreclosed are usually sold through an auction. The actual sale will be held at the courthouse. To be successful in buying bargain foreclosure property, certain steps should be taken.
Investing in buying an auction home can be a great opportunity to make money or find a great deal on a house. At the very beginning, obtaining and finding current information is necessary. You can start with the listings on this site but look at the web page for the entity that owns the property. It can provide valuable insight into the bidding process.
Familiarize yourself with your state’s bidding procedure
Every state’s procedures can be different. Some only want ten percent of the amount of the winning bid at the time of the auction. Others may ask for payment in full and in the form of a cashier check or cash. Online, you can find your state’s foreclosure laws that will define their procedures. Local real estate attorneys can also give you guidance. The best way to learn the procedures is to become a bystander at some of the auctions yourself.
Research the real value
In the circuit court you can find out the loan amount, any judgments owed and other liens that may be against the property. If you are not used to the land record computer system, a clerk will show you what to do. Check the building’s real estate value, along with delinquent taxes owed in the treasurer’s office. Call the substitute trustee and ask how much his or her fees are going to be added on top of what the lender is owed.
Knowing when the opening bid is a bargain
If you have done your homework, you know how much the real estate is worth and how much debt will have to be paid off after it is purchased. The difference in the amounts should be the profit or the equity you will immediately gain. However, this will not be truly recognized until you are at the auction and hear the opening bid. If it is too high, equity can be lowered considerably. Lenders lose money when they hold onto real estate for any length of time. Sometimes they will offer a lower bid to get rid of it. This will increase your chance at equity or profit and can be a real bargain.
Confirm auction date
At least a couple of weeks before every auction is held, check to make sure that it is still scheduled. The homeowners might have been able to scrape enough of the monies together to satisfy their debt and for the lender to terminate the proceeding. The lender may have had to reschedule for legal reasons.