You can really save a lot of money by buying a home at a public foreclosure auction as long as you do some research ahead of time so you know what you are doing. Banks are anxious to get rid of foreclosed properties because they are not fond of having to deal with real estate and want the money from the home sale as quick as possible.
A public foreclosure properties auction lets the bank get rid of the property and get enough money from the sale to pay the loan balance left by the previous owners.
Have you ever participated in an auction on a website like eBay? A public foreclosure auction is somewhat the same as what you did there but the stakes are higher and you need to be fully prepared and have all your ducks in a row.
Why do you go to a public foreclosure auction?
There are many different reasons to go to a public foreclosed homes auction so you should be clear about why you are going. Are you going to try to buy a property or just check it and see how it all works?
The next step is to find a public foreclosure auction in your area. It is a good idea to go to a public foreclosure property auction just to check it out before you go with the intent of bidding.
You need a letter of credit
Before you make a bid at a public foreclosure auction, you will have to meet with a mortgage company and make sure you can be approved for the amount you want to buy a home for.
If you are approved, they will give you a letter of credit so the auction officials will know you are a serious bidder who can come up with the cash. You may not be able to bid on a property at a public foreclosed homes auction without a letter of credit.
Another thing to consider is you will need to bring a cashiers check for the down payment if you plan on seriously bidding on a property for some public foreclosure auctions. Other auction companies let you get the check to them in a day or two.
Foreclosure auction listings
When you know how much you can borrow, you need to get a list of the properties for sale at the public foreclosure auction. The list should give you the basics about each house and there should be an address so you can at least drive by or walk around the property.
In most cases, you cannot go in the homes so you should not even try to see anything besides the exterior of the home. It is quite rude to ask the homeowners to let you in so do not even try it. Checking out the property ahead of time will give you an idea of how much work it will need and allow you to come up with a good maximum bid amount for the public foreclosure auction.
Do not miss out on a great opportunity but do not overbid
A public foreclosure auction is a great opportunity and can be very exciting but you need to be careful you do not get carried away and end up paying more for a property than it is actually worth or you will regret it.