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What To Expect At A Foreclosure Auction
hether you are an put down a deposit so that the
investor that would like auctioneer knows that you are a
to get into buying serious bidder and can fulfill
foreclosed homes for your your bid if you are the winning
personal use or to flip the bidder. Being pre-qualified just
property or if you are having sort of speeds up the process so
your home foreclosed on, you that you don’t have to mess
should know what to expect at a around with the deposit on the
foreclosure auction. Of course, day of the auction. During this
the actual steps that will be time you should also do some
taken can vary a bit from state research on the house by looking
to state and from house to house, into any liens that may be
but it’s good to know what you against the property, how much
will be getting into when you go the property is worth, how much
to a foreclosure auction. it has appreciated in the last
Foreclosure auctions can be few years, as well as property
exciting, even fun, but knowing values in the area. If the home
what to expect will help you make looks as though it will need some
the most of the experience, repairs, you should consider this
whether you are an investor or a as well when trying to come up
homeowner that is trying to get with how much you will be willing
your house back. to pay for the house. Without
this research, no amount of
Before the Auction knowledge about what goes on at a
foreclosure option will help you
You’ll likely find out about the because you won’t know where to
foreclosure auction in a local start when it comes to actually
newspaper and on the flier may be making a good bid.
information to pre-qualify for
bidding. This will allow you to What Happens At the Auction
over and the property has been
The auction will typically start sold to the highest bidder.
with the auctioneer reading legal
notices as well as a legal Once the bidding has ended a
description of the property. The foreclosure deed and purchase
auctioneer will usually then papers will be drawn up and
begin taking bids on the validated by the new owner or
property. If the auctioneer has purchaser and the mortgage
pre-qualified bidders the process holder. A grace will likely be
is more streamlined, if not, each given to allow the purchaser to
time a bid is made the auctioneer find financing or to come up with
will then ask for the bidders the funds to cover the full
deposit check, which is typically amount of the bid. This grace
right around $5,000 for period is usually 30 days unless
residential auctions. After each the purchaser and the mortgage
bid the auctioneer will attempt holder agree to other terms.
to solicit bids for higher After the grace period a closing
amounts. Each auction is will take place, so that the new
different, but the auction owner can formally take the title
increments usually are set by the to the property.
auctioneer and may be by $100,
$500, or $1,000 per bid. The What Happens, Now?
auctioneer will continue to
solicit bids by this increment The purchaser can do what he or
until it is clear that the she intended to do with the
highest bid has been reached. property, whether it is to move
Then, the auctioneer will into the home or to sell it for
announce, “Going once, going full market value. The money paid
twice, three times, sold!” by the purchaser will be
indicating that the auction is distributed in order of priority,
first of which would be taxes. become reinstated such as second
After taxes money will be paid to and third mortgages that became
the mortgage, then the second and void when the first mortgage
third mortgage if applicable. If foreclosed on the property unless
there is still money after paying one has filed bankruptcy and is
these debts, remaining money will truly free and clear of these
be paid to lien holders and debts. Owners will often drum up
creditors. There is a very slim the funds to make the deposit so
chance that there will be money that they can have another 30
left over after all of the debts days to try to save their home.
are paid, if this is the case Owners may or may not be
then the monies will be paid to successful in their attempts to
the former home owner. save their home at a foreclosure
auction.
What about the Original Owner?
As you can see, there are a lot
The original owner will often be of things that go into a
at the auction so that they can foreclosure auction, but none of
bid on their home, and this is them are all that difficult to
legal as long as they have the understand, but knowing about
deposit required. If the owner of them makes the auction more
the home that has been foreclosed enjoyable. The auction itself is
does bid on the home they must not all that complicated, but it
remember that the deposit is not can be very fast paced. At some
refundable and the deposit foreclosure auctions there are a
assumes that they will be able to lot of people, at others there
finance the home within the grace are only a few because of the
period. Owners must also remember location or just the debts
that if they buy the property attached to the property, or even
back old debts may merge and the state of the property. If you
are serious about the property bid in when you feel it’s time so
you should pay close attention that you have the best chance of
when bidding starts so that you being the top bidder.
are sure that you can get your
About the Author:
For more Information please Visit : Foreclosures and East Bay Real Estate
Read more articles by: John Nazareno
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