Buying Home through Foreclosure auctions – Get to know the auctions today

Auctions play a very important role in the purchase of foreclosed homes or property. Thus it is vital to know as much as you can about the auction processes and guidelines. My discussion today will be focuses to all the tips, tricks, do’s and don’ts while being at an auction. You need to behave per the policies of the auction so why not learn them before hand?

You need to reach the auction fully prepared. Don’t expect that you will be given details and information about the process or about the house foreclosed. Banks move towards when they want to liquidate the property. Their goal is to liquidate the property as soon as possible because they have much more pressing work on hand. Banks never provide house details as some regular real estate agent would give. Make sure you have all your homework done by the time you reach the auction venue.

Information that you likely have to get before you reach the auction place are the tax details, location, conditions and market value of the house at auction. Get as many legal records as you can. It is obvious that if someone, the owner or the tenant is already living in the house they won’t allow you to enter the house and make a detailed inspection. However a careful observer can notice a lot of important thing by just walking by or observing it from a distance. Don’t forget the neighbors in this regard. They can help you a lot in your quest.

Another important check is to ensure that there are no debts against the home. You may be liable to pay them off under certain regulations if you win the auction.

Never expect to move into the house the same or the next day if you win an auction. Transfer procedures may take up to a month or maybe more in some conditions.

Be prepared ahead of time so as to how much you would be willing to pay for the home in question. Auctions proceed very quickly and usually don’t give you much time to think. Restrain yourself from bidding more than the price you have set as your budget. Auctions may proceed in such a manner that you may feel inclined to bid more and more.

A good practice would be to attend a couple of foreclosure auctions before your desired auction so you may be able to adapt to the environment of the auction place.

It is good to reach the auction venue a head of time. If you intend to bid in the auction then do place a certain amount of money at the clerks table. This amount paid is refunded if you do not win the auction so you should not worry about placing a guarantee. This actually puts an impression that you are a serious bidder. You can either pay cash, or place a cheque if you don’t have cash at hand.

Reaching the venue earlier may give you a chance of getting into a conversation with the representative at the auction and you may learn some useful points about the property at auction. You can also get the value for the percentage of down payment required by the winner and make sure you have the required funds available at that particular time if you win the bid.

Be mentally prepared for quick legal procedures if you win a bid and always keep the necessary documents with you. You may expect to sign a contract if you are the winner of the bid. A down payment will also be required, which under normal conditions id the 10% of the bid value, failing to do so may cancel your deposit and the bid as well.

After you place the deposit, you will be given a timeline to make the complete payment, failing to do so will make you loose your deposit as well.

These are the general dos and don’ts you need to take care of while you are placing a bid at an auction. There are equal chances of winning or losing the bid, so don’t place a bid if you are not serious about it. You may loose the deposit money. You may even have to pay penalty charges if you win a bid and were not serious about it.

Do keep in mind that it is not compulsory that the final price would be the same or near to the minimum bid given. Auctions are mostly closed at higher prices. However the price, even if higher than the minimum bid will still be much lower than the market value of the property.

Placing a bid at any auction needs wise decisions at the back. Happy bidding!