Buying A Foreclosure Home At Auction: The Basics
The 5 Types of Homes That Sell the Fastest

Buying A Foreclosure Home At Auction: The Basics. If you’re interested in buying real estate for investment purposes, don’t just check out the nearest MLS listings. Technology has given entrepreneurs easier access to potential properties and information. Auction.com and especially the Auction.com app are here to make that connection more efficient than ever before.

WHAT TYPES OF PROPERTIES ARE SOLD AT AUCTION? 

While virtually any type of property or asset can be sold at auction, most home auctions—and the type you’ve probably seen discussed most—are Foreclosures. Essentially, there are two types of real estate auction: live (in-person) and online. The latter is becoming more and more popular with the investment community.

FORECLOSURE AUCTIONS IN PERSON

Real estate auctions look different depending on where you are buying. In some larger venues, such as in California, hundreds of Foreclosure properties might be auctioned on a single day at hotel ballrooms, for example.

In-person Foreclosure auctions are open to the public. Anyone can attend; however, if you want to bid, you may need to register. In almost all cases, you’ll need to be able to show that you have adequate funds to buy the property. 

Laws can differ based on state and county, so be sure to check out the specific rules governing your state.

THE PLAY-BY-PLAY: HOW TO BUY

 

STEP ONE: FIND THE PROPERTIES

Browsing Auction.com to find Foreclosure auctions is one of the easiest ways to find the properties you’re looking for. That’s because we have the largest online inventory of these types of properties. Remember: After creating a free account at Auction.com, you can easily view which Foreclosure homes are for sale near you. If you find something you like, save it to your favorites.

DO YOUR RESEARCH 

Be sure you read and understand all due diligence documents and transaction details prior to the auction. It wouldn’t be a bad idea to seek independent advice from a real estate attorney or a knowledgeable agent.

Research the estimated resale value of the property, how much the borrower owes on the mortgage, and whether there are any liens against the property. This last point is especially important. If you’re the winning bidder, you may have to pay off these liens. It’s worth hiring a title company or real estate attorney to run title searches on properties you’re interested in bidding on.

DRIVE BY THE PROPERTY, IF POSSIBLE

You obviously want to know as much as possible about the property you want to buy. While Auction.com collects some due diligence information for bidders to review, there’s limited information about the state of the property being sold. One straightforward way to learn more is to simply drive by the property. BE AWARE that you should never trespass or disturb the occupants of the home.

When you bid on a Foreclosure, you’re bidding on the property “as-is.” You won’t know what condition you’ll find inside once you take possession. Extra, unexpected repairs could cost you thousands of dollars, so take that into account when figuring out how much you can comfortably bid. A good fixer-upper is the start of every great flip. 

GET YOUR FINANCING IN ORDER 

Most Foreclosure auctions accept cash, bank money order, or cashier’s checks for payment. In certain states, you will have to pay in full immediately following the auction of the property; other states allow you to pay a percentage at auction and the rest within a certain period. 

CONFIRM ALL AUCTION DETAILS, EVEN ON THE DAY OF THE AUCTION 

It’s very common for Foreclosure auctions to be postponed or even canceled. Sometimes an auction is canceled because the borrower comes up with the money to pay the lender the amount they owed, obtains a loan modification, or sells the property prior to auction date. Auctions might be postponed for a myriad of reasons; for example, the bank or lender might not be able to compile the proper documentation in time, or the owner might request more time to complete a sale.

ATTEND THE AUCTION AND BID

Check-in at least one hour before the auction starts. Get an Auction Bidder Card and raise it when the auctioneer announces a price that you’re prepared to accept as your winning bid.

If you win the auction, your payment is due immediately or the following business day (dependent on the state). You’ll then be asked to complete a certificate of sale or an execution of sale receipt, deed upon sale, and an IRS Form 8300, subject to state-specific laws.

Source: Auction.com


Are you ready to take the next step to buy your home and start building a legacy for your family?…Let me help you!

I am a Brazilian Licensed Realtor at Re-Connect, LLC with 17+ years of experience in the Real Estate industry. I speaks 3 languages (Portuguese, English, Spanish)

CALL NOW: (617) 201-9188 Ana Roque |209 West Central Street, Natick, MA  

 

Related posts:

The 5 Types of Homes That Sell the Fastest

December 8, 2023

What kind of insurance do you need with a mortgage?

When you have a mortgage, several types of insurance can be beneficial or even required by lenders:
December 5, 2023

How can you start an artisan food business in your home kitchen?

Starting an artisan food business in your home kitchen in Massachusetts can be done through the Cottage Food Law, which allows certain non-perishable ...
December 1, 2023

How to Convert Residential Property to Commercial Property?

How to Convert Residential Property to Commercial Property? Converting a residential property to a commercial one involves several steps and considera...
November 28, 2023

What is important to know about a Real Estate Agent

Your real estate agent plays a critical role in buying or selling property. Here are some key things to know:
November 24, 2023

What happens if you inherit a house that still has a mortgage?

Inheriting a house with an outstanding mortgage can have several implications{read more...}
November 21, 2023

Is it hard for seniors to get a mortgage?

Getting a mortgage as a senior can present some challenges, but it's not impossible. Lenders typically consider several factors.....
November 15, 2023
Why are ranch homes more expensive?November 14, 2023
Reasons to have a lawyer when buying a houseNovember 9, 2023

Can you transfer a mortgage to another house

November 6, 2023

How to convert residential property to commercial in Massachusetts

Converting a residential property to a commercial property in Massachusetts typically involves a series of legal and regulatory steps.
November 3, 2023

What are the advantages of refinancing a home?

Refinancing a home can offer several advantages, depending on your specific financial situation and goals.
November 2, 2023

What are the requirements for a first-time home buyer in Massachusetts?

The requirements for a first-time home buyer in Massachusetts can vary depending on the specific program or lender you choose to work with.
October 27, 2023

Can I build a covered patio without a permit?

Can I build a covered patio without a permit? Whether you can build a covered patio without a permit depends on your local building codes and regulati...
October 26, 2023