If a home owner fails to make their timely payments the bank or lender will begin the foreclosure process. The home owner is given several opportunities to satisfy their debt with the bank, if they cannot a date is set for the property to be sold at auction. In most cases the home owner has until the day of the auction to deliver the monies owed to the lender. If the monies are not delivered to the lender the auction will take place.
Qualified buyers can bid on the home, within parameters set by the lender. There is frequently an opening bid set and publicized before the auction. There are tremendous differences between states and even auctioneers as to how the auction transpires. It is absolutely vital that a buyer at a foreclosure auction understand the rules and regulations of any auction they are participating in. Some auctions require a cash deposit at the time of the auction, others require proof of financing. In many states you are not able to inspect the property before the auction, in some states there is a brief window of time in which an inspection can occur.
It is also vital to understand the tax laws regarding foreclosure properties; in many states the highest bidder is also responsible for any tax liens on the property.
The great advantage to buying at foreclosure auction is that you can sometimes get great deals, but only if you are extremely well informed and well prepared.
The advice and tips offered in this blog are intended to be solely informational and do not apply in all circumstances. Make sure that you consult a real estate professional, financial consultant, attorney or accountant before taking any action. For further information or questions please contact Gabriella@IARNY.com