How To Get A Bargain At A Public Foreclosure Auction
If you're going to be attending a public foreclosure auction, with the hopes of buying a property, do your homework ahead. Such auctions can provide real bargains...The bank doesn't want to be in the real estate business – they're in the money business. Owning homes ties up money they want available. So they're selling. A public foreclosure auction is a way for the bank to recoup some of their losses – hopefully giving them at least as much money as what the homeowner still owed on their loan.
Have you ever bought anything on an online auction site? If so, you know how public auctions work – foreclosures are similar, but in real life. You need to dot your i's and cross your t's, and be prepared to win.
Know Before Going In Where You're Going
Before you attend a public foreclosure auction, you need to know your purpose in going. Are you just going out of curiosity, to see what it is like, with no intention of buying anything? Then find out when and where, and attend. In fact, attending without intention of bidding is a great way to test the waters, to find out how the auction venue works and what is expected of bidders.
If you're going and plan to buy something if you can, you need to check with your mortgage poker first. After careful consideration of your financial situation, and in consultation with a lender, the mortgage poker can give you a letter stating the amount you are prequalified to get a loan for. This helps the auction house know that you are a viable offer. Without a “prequal” letter, they are not always able to take your bid at all. You will also need to have a cashier's check in the amount of your down payment. Check will the public foreclosure auction company ahead – some require it on the spot at the auction, others need it delivered within a few days of close of auction.
Once you know your limit, get the listing of houses up for auction from the auction house. It should tell you basic information about each, including the address. You should go visit any homes you are interested in buying. While you aren't likely to be able to see the inside, you can see the outside and part of the yard without any trouble at all. Please don't disturb the current occupant – they don't need a reminder that soon their house won't be their house anymore. Once you see the home in person, you can determine a reasonable amount you would be willing to bid up to during the public foreclosure auction.
Shoot While The Ducks Are Flying
Once you are at the foreclosure auction open to the public, be prepared to bid up to your predetermined maximum. Keep your head, though – don't get excited with auction-fever and big above what you are willing or able to follow through on.
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