Buy Home Foreclosure Auction

Ever wonder how people make money in real estate? If they aren’t landlords, then chances are they have been buying and selling properties they have discovered through real estate foreclosure auctions. Real estate is like stock in that you have to buy low and sell high in order to make a profit. Participating in a foreclosure auction is a great way to buy low.

Know Your Market

Although you could subscribe to online services that let you know when foreclosure auctions are going to happen anywhere in the country, you are asking for trouble buying property in a market you know nothing about.

For example, it’s no good buying a mini mansion in South Carolina if it’s located in a town hit by a hurricane last year. What you need to do is know what specific market you want and then wait for a foreclosure auction in your desired area.

Bidding Etiquette

It is perfectly okay to contact the owner of the property to try and do a deal so the property doesn’t go on the foreclosure auction block. Usually, owners are given about a month to find a buyer. It’s often much easier for banks or the government to deal with sales of foreclosed property than an auction.

If things don’t work out, you can still bid on the auction. It is up to you to find out what realtor is handling the auction and if you can phone in a bid or if you have to attend in person.

It’s not up to the owner of the property to let you know all of the gory details. Since laws about bidding on foreclosure auctions differ in each state, you have to acquaint yourself with your state’s laws (or the laws of the state where the property is located).

What Am I Bid?

Usually, a good bid is twenty percent less than the estimated market value of the home or property being foreclosed upon. You can find the estimated market value by reading the complete valuation report or property reports.

However, it is urged that you not only inspect the property yourself, but hire your own home inspector to give it a once-over. Although you can get bargains at a foreclosure auction, it’s not a bargain if you bought a home just about ready to fall apart.

Depending on the foreclosure laws in the state where the auction is taking place, you may have to pay for the property in full. Keep that in mind when determining your bid.