How To Buy A Foreclosure – Bank Owned Auctions – The home buying process can be exhausting, especially if you’re negotiating a price with a real estate agent.
How to buy a foreclosure property or from a bank or government owned auction seems realistic. Until you realize what it will cost to fix up the property and that can get expensive. For around the same price, you could just buy a house listed on the real estate market and not have to do any repairs.
But here’s the risk. Most people enjoy buying a house in less than a minute with no formal inspection. That means no mortgage or formal closing costs. You simply buy a foreclosed lot or home at auction from your local sheriff, county treasurer or from another government agency.
As the number of foreclosed homes nationwide surpass historic highs, investors and some home buyers are finding what they consider the bargains of a lifetime. But while the prospect of cutting out real estate agents and mortgage lenders may seem tempting, buying a foreclosure is not for the faint of heart.
If you’re going to attempt to buy at a genuine government-sponsored foreclosure auction be prepared to do a lot of homework.
The first question you should ask yourself: Is a foreclosure really right for you? One major drawback for those seeking a foreclosure is that buying this way requires a lot of cash. You typically have to make a 5% deposit on a property before you can actually bid.
Then, if you’re the successful bidder, you’ll be required to pay the entire purchase price within 24 hours of the auction. No mortgage money here, at least not until well after you’ve purchased the property. You will also have little, if any, opportunity to inspect the property before you bid on it.
Finally, you have to be especially careful that the property you’re bidding on doesn’t have hidden mortgages or other liens that take priority over the one you’re bidding on.
Real estate is risk business, but if you do your homework on the foreclosure before you buy it, you can yourself a lot of time at the auction.