Is a Foreclosure Auction Right for You?
Buying a foreclosed home can generally mean that you will be getting a deal as long as you do it right. One of the ways to do this is at a foreclosure auction. Below are five tips you should follow to determine if a foreclosure auction is right for you, and if so, how you can get the best price for your foreclosure property at the auction.
Learn the Ways of Auctions
If you have never been to a foreclosure auction before you should attend one or two before going to bid on the home you like. It is important to be confident with yourself before making your bid. Also research the rules and laws for auctions so you are able to get your home without making any costly mistakes. Remember: foreclosures are generally sold as is, which means you will be doing the repairs and improvements on your dime.
Finding the Auctions
Once you have learned the ways you will need to find an auction to bid at. You can check local newspapers or realtors which will carry lists of homes which are foreclosed on or have defaulted mortgages. You can also look on the U.S Department of Housing and Urban Development’s lists of these homes.
Looking into the Property
Before deciding on the home you want to buy you will need to do some research on the property. Speak to a realtor about what the home could cost. Go and take a look at the home and get a general idea of the repairs you may have to do. You may not be allowed inside the home but the outside can give you a general idea. Lastly, make sure you look into any liens or extra mortgages taken out against the home because you will be held responsible for these.
Deciding how Much to Bid
You will want to make a solid bid on the home without going to0 high and over paying. Talk to your realtor about how much they think you should offer based on the value of homes in the area. Also talk with the auction agent about the minimum bid the banks will accept. Banks will want to make sure they are able to cover the rest of the unpaid mortgage; however, this could be too high based on the current value of the home. Remember: don’t bid so low that your offer will not be considered by the bank.
Being Confident at the Auction
You are finally ready to go to the auction and place your bid but you need to decide on the highest amount you’re willing to pay so you don’t get caught up in the bidding process and pay too much. Come to the auction prepared to make a down payment and have money ready to pay the remaining amount shortly after the auction date if you get the home.
Getting a home at a foreclosure auction can mean getting a great deal if you do it right. Remember to do your research and be prepared when going into the auction so you can get the home at the right price.