![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/12\/foreclosure-auction-sign.png\")
<\/a>Understanding the foreclosure auction process<\/h2>\nWhat is a foreclosed home?<\/h3>\n
A foreclosed home<\/a> is a property that has been seized by the bank because the owner failed to make their mortgage payments<\/a>. Homes go into foreclosure for a variety of reasons, including job loss, medical issues, or divorce. When a homeowner fails to pay for several months, the bank will serve a notice of default<\/a> and enter into foreclosure proceedings.<\/p>\n The foreclosure process varies from state to state, but there is always a redemption period<\/a> in which homeowners have the right to retain ownership by satisfying all payments and interest. If they do not, the property moves into the hands of a bank-appointed trustee and may then move onto the auction block.<\/p>\n Approximately 40% of foreclosed properties go up for auction<\/a>. Much like a traditional auction, a foreclosure auction allows potential buyers to bid on the bank-seized property. These auctions can be conducted in person<\/a> (either at the actual site or in a public building) or online<\/a>. There may or may not be a minimum bid or reserve<\/a> (more on this to follow).<\/p>\n You can find out about real estate foreclosure auctions through a number of sources<\/a>, including:<\/p>\n Laws and regulations governing auctions vary state by state. For that reason, auction-goers should look up the auctioning entity \u2014 whether it\u2019s an auction house or real estate brokerage firm \u2014 on that state\u2019s department of licensing website. Each state\u2019s department name is slightly different, but a quick search of \u201cauctioneer licensing in [state]\u201d will bring up the governing body in your state.<\/p>\n Bottom line: you\u2019re looking for verification that the auctioneer is qualified, licensed, and has no outstanding complaints. This is especially important when focusing on foreclosure auctions, due to the extra level of care needed when dealing with the state regulations of redemption periods.<\/p>\n Debbie Shuler, an expert real estate auctioneer at Cliff Shuler Auctioneers & Liquidators<\/a> with more than forty years of experience in Florida, cautions bidders to do their due diligence in terms of research. She says, \u201cUnder the laws of real estate, auction is one of the services that can be performed by a real estate brokerage firm. However, that doesn\u2019t mean they know what they are doing \u2014 so check them out.\u201d<\/p>\n Each auctioneer has a different set of rules, and you\u2019ll need to read them carefully. Look for the following:<\/p>\n First you\u2019ll need to know what auctions are coming up, so watch those auction advertising outlets mentioned above. By looking ahead, you\u2019ll be able to have adequate time to research the home before it\u2019s time to bid.<\/p>\n Shuler says, <\/b>\u201c<\/b>Do your research on the property. Talk to the building department, zoning officials, tax assessor, etc. from the county. Know and understand what you are buying, what\u2019s included, and what the subdivision may require, along with the county and the city.\u201d Some things that you may want to ask include:<\/p>\n You may or may not be able to walk through<\/a> the foreclosed home before bidding, and online pictures can be sparse or nonexistent. In addition, there\u2019s no guarantee that you\u2019ll be able to have a home inspection<\/a> done on a foreclosure auction property. For that reason, you\u2019ll want to prepare financially for probable repairs and updates. Maureen Connolly<\/a>, a real estate agent in New York with 17 years experience, says that it\u2019s best to bid locally when possible, so that you can at least do a drive-by of the property to visually assess it from the road. Keep in mind that (despite what reality TV may lead you to believe) walking onto the property and peering into windows is not legal<\/a> unless otherwise specified on the listing.<\/p>\n A title search<\/a> is also a good idea. A home may move into foreclosure due to failure to pay tax assessments in addition to mortgage payments. In that case, there will be a tax lien<\/a> placed on the property until the debt is settled. To conduct a title search<\/a>, you can either visit the county courthouse in person or search the local county assessor website.<\/p>\n Before you go into an auction, you\u2019ll need to know how much you can and should bid. Many times the opening bid represents the amount owed on the property (a minimum bid auction<\/b>); other times, it\u2019s set much lower in an effort to attract bidders (an absolute auction<\/b>). Either way, there are three things to keep in mind.<\/p>\n You\u2019ll also want to give yourself a generous budget to account for probable repairs and updates. If someone hasn\u2019t been able to make their mortgage payments, there are probably other home maintenance tasks that have fallen by the wayside.<\/p>\n Connolly says that her buyers have seen major repairs come up after foreclosure auctions, such as the need to replace plumbing and electrical systems. Since you may not be able to get an inspection, give yourself a buffer for the following items, making your best estimate based on your locale and the size of the home:<\/p>\n In a foreclosure auction, you may end up bidding against established real estate investors. They have a strategy for getting a profitable deal at auction, and so should you!<\/p>\n Buying a foreclosed home at auction can be risky, but it can also present an opportunity to get a good deal. Do your homework, and enlist the help of professionals when necessary.<\/b> A real estate lawyer<\/a> is an excellent resource, as is an expert real estate agent<\/a> in your area.<\/p>\n Because of the nuances in auction regulations, local knowledge of real estate auction procedures is imperative when embarking on this kind of adventure, especially for the first time, so don\u2019t hesitate to consult a local expert. Happy bidding!<\/p>\n Header Image Source: (Bill Oxford\/ Unsplash)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Can you get a good deal by bidding at a foreclosure auction? We\u2019ll pull back the curtain on the process and give you tips to bid like a pro.<\/p>\n","protected":false},"author":145,"featured_media":13357,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,629,635],"tags":[],"class_list":["post-13355","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-home-financing","category-auctions-foreclosures"],"acf":[],"yoast_head":"\nWhat is a foreclosure auction?<\/h3>\n
How are foreclosure auctions advertised?<\/h4>\n
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<\/a>What it takes to succeed in the foreclosure auction market, step by step<\/h2>\n
Get a feel for how real estate auctions work in your area<\/h3>\n
Understand the requirements before getting involved<\/h3>\n
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Research your options<\/h3>\n
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Figure out your budget<\/h3>\n
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<\/a>Bid like an auction pro<\/h3>\n
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