Foreclosure home auction is a good way to own a house, but it also requires a lot of research and information gathering.
Tips To Get Good Deals At Foreclosure Home Auctions
Before going for the auction, it is important to do some research and gather critical information. If you plan to bid in the foreclosure home auction, you cannot retract the bid. Hence, get information regarding all the properties being auctioned, but focus only on one property, or small number of properties. Get the idea regarding market value before bidding.
It is unlikely that you will be able to see and inspect the property being auctioned. If the owners are still living in the house, they are not going to allow people to assess their home from where they are going to be thrown out soon. However, if you really like any house, which is open for bank foreclosure auction, ask for the inspection. If that is not possible, drive to the property, and take an inspector along who can help you assess the house. If you are not able to find out much about the property, just presume that it will require significant improvements and repairs, so prepare your budget accordingly.
It is also essential to identify any liabilities, liens and unpaid property taxes attached to the foreclosure home auction property. When you purchase a foreclosure home, be prepared to accept such taxes, liabilities and liens, else you might be in for a nasty shock. Do the title search and other enquiries to find out the outstanding financial obligations attached to the house.
The bidding amount is mainly based on the strategy for monetizing the foreclosure. You need to calculate the expected returns, and then calculate your maximum bid accordingly. You might just want to make some cosmetic changes and then sell shortly after buying, rent it out, or you can also stay in it after modifications.
When going for a foreclosure home auction, you will have to pay a deposit on the property that you purchase. This is usually the 10% of the winning bid price, and it must be paid on the same day in the form of certified funds. The criteria for balance payment vary as per the state, but most probably, you will have to pay the balance within 30 days of the auction.
The foreclosure home auction can be intense and fast-pacing, and one can easily get caught up in the bidding-war. It is however important to stay rational and calm, and just stick to the plan. Only bid on the properties you like, and bid only the maximum that you previously decided.