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How to Buy Homes at Auctions?

Buying Home at Auction

Buying repossessed properties at foreclosure auctions certainly offers buyer and investors several advantages. Aside from enjoying savings, buyers can easily take ownership of the property as soon as the bidding ends. But being successful at buying bank foreclosures from auctions require some serious preparation.

To give you an idea of how to make a successful purchase via auctions, consider the following Step-by-Step Guide:

Step #1 Finding Bargain Deals on Foreclosures

This first step is actually the easiest part considering the information you can utilize by subscribing to Foreclosure-Auction.net. Simply compile the data on each foreclosure property you are interested and create a "dossier" for each. By doing so, you can keep information about these properties organized, which will make it easier for you to keep track of them.

Once you have come with a shortlist of potential properties to bid on, it would be a good idea to check out these properties to see for yourself the condition they are in and even have an idea about the local neighborhood. If you are lucky, you might talk with the owner or a neighbor who can give you some relevant information about the home. Use this inspection to compute for your bid amount and make sure you take into consideration repair costs, holding costs and other incidentals.

You might also want to conduct a title search to check for secondary liens and encumbrances. If there are, you need to know you will also be inheriting these debts if title is transferred to you.

Step #2 Preparing to Attend the Auction

After finding potential foreclosures to bid on, you need to start preparing for the actual auction. Consider doing the following:

  1. Checking the foreclosure auction notices and taking note of the date, venue and time of the auction you are planning on attending.
  2. Calling up the trustee or auction house to inquire about requirements, such as pre-registering, bringing of Identification Cards and what their payment terms are. You can also ask about the foreclosure property you are interested in if it is still up for auction, the opening bid amount and other details related to the foreclosure.
  3. Organizing your things to bring, including all your files on the properties as well as pens and a calculator.

Some buyers attend foreclosure auctions once or twice just for watching to get a hang of the entire proceeding. You can choose to do this as well to familiarize yourself.

Step #3 Attending the Auction

On the actual date of the auction, you need to make sure you have with you all the auction house or trustee requirements, especially the cashier's check corresponding to your bid amount. Most auctions require the bidders to pay their bid amount in full, so you have to be ready. You also have to understand all the other bidders have done the same work you did and are quite serious about taking home the foreclosure they want. It is okay to feel nervous, but you need to stay focused and rely on the information you have gathered.

Step #4 Placing Your Bid

Before you place your bid, you need to check your files if you are still within your budget. You should set a maximum bid amount for each property and make sure you follow them to avoid going over the budget. This is important, especially if the starting or opening bid is higher than your maximum bid amount. In such cases, let the other bidders place their bid and wait for the next property on your list.

Step #5 Taking Ownership

If you made the winning bid, you should immediately ask the trustee or head of the auction house their payment terms and other requirements. Some would agree to a down payment with the balance payable within a certain period while others demand outright settlement of the full amount. Transfer of title can happen within the same day or after a couple of days. In any case, get a title insurance to protect yourself from adverse title claims.

For more information and tips on buying repossessed properties at foreclosure auctions, simply browse Foreclosure-Auction.net.

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