Buying foreclosures at the auction is a great way to purchase a property under market value. Most properties are auctioned on the courthouse steps. The property is auctioned off to the public and the highest bidder walks away with the property. This can be very rewarding to those who are in a position to buy the property within a short amount of time and can be devastating to those who bid without proper financing in place.
Buying property in a pre-foreclosure stage the period between receiving a Notice of Default from the lender and the day the lender puts the property up for an auction may offer the best bargains, but it’s also the most difficult.
For starters, you have to deal directly with the owner of the house, who may not even be aware that the house was made public in a foreclosure listing.
Buying pre-foreclosures is to create a situation where everyone wins. This type of strategy involves just you, the homeowner, and in some cases the lender. Because the homeowner has been delinquent on his or her mortgage payments, they are now in a position to entertain offers made by investors. Buying foreclosures at the auction is also the riskiest place to pick up a foreclosure.
When buying foreclosures at the auction first visit a local auction to get a feel for the bidding procedure, find out how much is required as a down payment and when the rest is due, calculate potential profits and follow the property to the auction and participate.
Buying foreclosures that are REO is by far the easiest way to pick up a distressed property. Lender’s are always listing properties that come back from the auction, because they don’t like excess inventory. They are in the lending business, therefore it is quite easy to find these types of properties. Again be careful on choosing an agent or spending money in ways that you can have a proper compensation on the house or home that you want to have.