One of the best known but least understood, ways of buying foreclosure properties is to buy in a live auction. Depending on where you live, an auction foreclosure in general, be held either at the county courthouse or some other public place. Sometimes, the auction will be held by the sheriff county and sometimes by a representative appointed by the court. Regardless of who is elected to conduct the auction, the result is the same: the property is sold to the highest bidder.
The first offer is typically made for foreclosure lender who represents the company. The offer will generally be by the amount owed, but need not be any actual exchange of money at stake. If no one puts in a higher bid, the property reverts to the lender.
In most cases, no one is up for foreclosure sale except the proxies for the lender and you can run the auction. This is especially true if there is no room for profit between what you owe and the market value of a property.
Make no mistake: the exclusion auctions are generally not places from beginning investors, because you need to access any significant amounts of cash or a large credit line that you can quickly take advantage. If you have any of these resources at their disposal, they sometimes find great buys at auctions of foreclosure, but be careful, because the Most of the time the amount owed does not leave much room for profit, if any. The properties that contain a significant amount of space for a more likely benefit to be served by a larger group of investors. The key is to do your homework, because a mistake can be costly.
If you want to check you at auctions same, the first thing you have to do is find out which publication is used to list. Often it is the legal section of your local newspaper, although some of the great cities use specialized business papers to promote sales of foreclosure. There are also several services that will be notified of foreclosures in their target area by subscribing. If you happen to be interested in a particular property, you may contact the company in charge of the auction to date information on and place of auction. Call the day before the auction to see if the defect has been cured or the sale has been delayed for some reason.
Always remember, if you make a offer, should proceed with the purchase. No turning back once you've committed to buy a foreclosure property at auction. So do your homework. Would convenient for you to choose a few target neighborhoods and specialize in those areas, so you know how much profit is available even before considering bidding on a given property.
Although rare, occasionally you can find some great deals at foreclosure auctions. If nothing else, you will find that education just to attend a few, just to see how the system works.
Copyright © 2006 Jeanette J. Fisher
NOTE: Government-owned foreclosures have an entirely different bidding system. See How to Buy a HUD Repo
Jeanette Fisher teaches beginning real estate investors how to make money in any real estate market fixing and flipping houses at http://www.doghousetodollhousefordollars.com
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