Buying Foreclosed Homes at Public Auctions
Given the frequency of foreclosure in today's economy, home auctions are overflowing with truly amazing deals.
For those who don't know what a foreclosure is, it's where a property ends when the owners are unable to pay their mortgages.
Depending on where the homeowners got their mortgages from, be it the bank or the government, the lending foundation will repossess the home and the previous owners have to vacate the premises.
More often than not, when this occurs, the property in question ends up on the auction block.
While it may seem that banks are trigger-happy when it comes to foreclosing on properties, the reality of the situation is that foreclosure does the bank no favors.
Not only do they lose out on the mortgage they loaned to the defaulted owners, but they also have to deal with the carrying costs until new owners are found.
These fees, which include paying for Realtors to sell the properties, as well as handling the property taxes due on the houses, can become exorbitant if new owners aren't found sooner rather than later.
Unsurprisingly, lots of lenders who find themselves the unwilling owners of houses end up putting the properties up for sale at a home auction at significantly reduced prices.
These homes must go, all of them, fast! That means that there are great deals to be had for those who want to get property on the cheap.
Often, buyers can purchase homes at a mere fraction of the cost than what they would see in a normal sale on the market.
If this sounds like an appealing way to buy property to you, you'll need to be aware that the process of buying property through a home auction is a little unusual as compared to the traditional way.
First, it's important to know what houses are up for auction and to go look at the places you could potentially want to buy.
Usually, the houses that will be up for auction are released at least four weeks prior to the auction itself, so potential buyers can go have a look at the current condition of the house, as well as the surrounding neighborhood.
When buying a house at auction, it's also important to set limits for yourself as to how much money you can actually spend.
Once you put up the winning bid the house is yours whether you can pay for it or not...
most of the time.
Additionally, even if you can't secure the extra funding you may have to take on the property - in the event that you can back out on the bid, the fees for doing so are often quite steep, as much as 25 percent of the original bid.
The properties themselves will also be sold as-is.
Whether or not you're allowed a home inspection prior to the auction depends on the auction itself; but even if you are allowed a home inspection, realize that neither the auction house nor the lending institution that is auctioning the property is responsible for fixing it.
You'll have to buy the property as you see it.
The good news is that even properties that have serious structural issues can be fixed at comparatively low cost, given that you'll likely win the property well below the market value of the house.
With house auctions as common as they are, they're becoming an increasingly popular way for people who otherwise might not be able to afford to buy property a chance to do so.
Just be sure to go in with the right information and set limits!
For those who don't know what a foreclosure is, it's where a property ends when the owners are unable to pay their mortgages.
Depending on where the homeowners got their mortgages from, be it the bank or the government, the lending foundation will repossess the home and the previous owners have to vacate the premises.
More often than not, when this occurs, the property in question ends up on the auction block.
While it may seem that banks are trigger-happy when it comes to foreclosing on properties, the reality of the situation is that foreclosure does the bank no favors.
Not only do they lose out on the mortgage they loaned to the defaulted owners, but they also have to deal with the carrying costs until new owners are found.
These fees, which include paying for Realtors to sell the properties, as well as handling the property taxes due on the houses, can become exorbitant if new owners aren't found sooner rather than later.
Unsurprisingly, lots of lenders who find themselves the unwilling owners of houses end up putting the properties up for sale at a home auction at significantly reduced prices.
These homes must go, all of them, fast! That means that there are great deals to be had for those who want to get property on the cheap.
Often, buyers can purchase homes at a mere fraction of the cost than what they would see in a normal sale on the market.
If this sounds like an appealing way to buy property to you, you'll need to be aware that the process of buying property through a home auction is a little unusual as compared to the traditional way.
First, it's important to know what houses are up for auction and to go look at the places you could potentially want to buy.
Usually, the houses that will be up for auction are released at least four weeks prior to the auction itself, so potential buyers can go have a look at the current condition of the house, as well as the surrounding neighborhood.
When buying a house at auction, it's also important to set limits for yourself as to how much money you can actually spend.
Once you put up the winning bid the house is yours whether you can pay for it or not...
most of the time.
Additionally, even if you can't secure the extra funding you may have to take on the property - in the event that you can back out on the bid, the fees for doing so are often quite steep, as much as 25 percent of the original bid.
The properties themselves will also be sold as-is.
Whether or not you're allowed a home inspection prior to the auction depends on the auction itself; but even if you are allowed a home inspection, realize that neither the auction house nor the lending institution that is auctioning the property is responsible for fixing it.
You'll have to buy the property as you see it.
The good news is that even properties that have serious structural issues can be fixed at comparatively low cost, given that you'll likely win the property well below the market value of the house.
With house auctions as common as they are, they're becoming an increasingly popular way for people who otherwise might not be able to afford to buy property a chance to do so.
Just be sure to go in with the right information and set limits!
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