Buying Foreclosure Properties at Public Auctions
Due to financial hardships, some people just want to get rid of their foreclosure property quickly. Banks want to get rid of these foreclosed houses with haste, as their sitting on the market hurts the bottom line. As the inventory of real estate owned (REO) properties grows, banks are increasingly selling foreclosed properties at auctions to reduce supply.
A quick and efficient way to sell and buy property, real estate auctions are gaining in popularity nationwide. At a bank auction, homes in foreclosure are auctioned off to the highest bidder. These auctions typically take place during public sales at county courthouses. Often called repo homes (since they have been repossessed by the government), bank auctions provide potential investors with a chance to purchase homes in foreclosure for less than their market value.
The opening bid at a foreclosure auction is based on the total amount owed to the foreclosing lender, and may include fees incurred because of the foreclosure proceedings. The winning bidder receives the foreclosed property in the same legal condition the property was in before the mortgage was created. Before you make a bid, be sure that the price you’re willing pay is comparable to other homes in the neighborhood. Also consider the amount you’ll have to put into the bank foreclosure for renovation.