Buying Foreclosures at Auction
While foreclosure auctions have long been a favorite place for investors to scope out new opportunities, the downturn in the economy and the accompanying high foreclosure rates mean the pickings are better than ever. That is, the pickings are excellent for anyone who happens to have money to spare.
With foreclosures flooding the market and everyone staying on a tight budget, prices are staying quite low at auction and a large number of houses aren’t selling. For those who have the capital to put into a real estate venture and have a bit of expertise to help in determining which are potentially good investments, this is an opportunity that won’t likely be equaled. The big question on many people’s minds is, how do I buy these foreclosed properties at auction?
The first thing to understand is that many properties never make it to the auction block, because an auction just about guarantees higher prices and smaller profits. However, if you’ve made up your mind that you want to wait for foreclosure auctions, find a listing of foreclosures and pre-foreclosures in your area. These can be obtained from several online sources, or the notices of foreclosure can be found at your local courthouse. Many times, realtors and real estate agents also keep lists of area foreclosures.
Research all properties of interest ahead of time. Request a viewing, if possible, or at least drive by the property to see what it looks like from the outside. Run checks through the courthouse to determine what liens are on the property and if there are any back taxes owed on it. Finally, write down all the details on each of the properties of interest and determine how much you’d be willing to pay for a given property, then find out the date of the auction and make sure you’re there to bid on your chosen property.
Buying at auction carries a number of risks. Namely, there is a lot of time and effort involved in researching properties, and there’s always the possibility that you will be bid over. Alternatively, the property may never make it to auction either because of a pre-foreclosure sale or because the owner came up with the means to stop the foreclosure process on their property.
