Bidding at Foreclosure Auctions · Apr 16, 10:16 PM by Sharon Reed
Once a property is re-possessed from the owners due to mortgage default, the foreclosed home will be sold at one of the foreclosure auctions. Before joining one of these foreclosure auctions, you should first find out if there are properties that would be worthwhile investments. To help you find out if there are indeed foreclosure homes worth purchasing, you should do the following:
• Find out the total amount owed on the property. This amount usually represents the initial bid plus added foreclosure costs.
• Determine the foreclosure property’s market value. You can compare this amount to the initial bid asked at the foreclosure auctions and you can simply get their difference. The amount you obtain should make you realize the potential bargain for the property.
• Research on the property by purchasing reports such as Legal and Vesting report, Transaction History report and Comparable Valuation report. You can easily obtain these reports via professional real estate agents like Foreclosure Deals. These reports will help you determine whether the property has secondary liens like a tax lien.
• Include possible repair costs when calculating the potential profit you might gain from the purchase.
You should also research on the bidding procedure that is practiced in your state. There are some foreclosure auctions that require participants to have the full amount of their bid ready. It could be in the form of cashier’s check or cash. Of course, the best way to learn how to bid is to attend one of these foreclosure auctions and observe the other seasoned bidders.
When you bid, make sure that you do not overbid or be influenced by the other bidders. If it is your first time, try to arrive early at the foreclosure auction so that you have enough time to prepare for the actual bidding process.
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