How do foreclosure Auctions work

Document Sample
How do foreclosure Auctions work Powered By Docstoc
					How Do Foreclosure
  Auctions Work




       Learn how to verify foreclosure auctions and laws,
         make bids and take ownership of properties.
   The Foreclosure Process
Normally, a property which is delinquent in
payments for 90 days or more can be started
through the foreclosure process by the lending
institution
A legal notice of foreclosure, Demand Letter, is
sent to the owner
If no response, the property is submitted to
court for formal foreclosure proceedings
 Scheduling & Advertising
Property and home auctions must first be
advertised
An auction date is set after a period of
advertising time which varies from state
to state
A Notice of Foreclosure is placed on the
property & the owner has until the
auction date to settle the delinquent loan
amount to stop the auction
    Auction Formats
Minimum Bid

Absolute Auction

Auction with Reservation
 Bidder Verification

A bidder must provide proof of
funds that they can pay for the
property before the auction
begins

Cashier’s check for a deposit

Pre-approved loan paperwork
     Who Can Bid On
  Foreclosure Properties
Most home foreclosure auctions are
public
Everyone approved by the trustee can
bid
Some auctions allow internet bids
Some auctions only accept sealed bids
Check county foreclosure auction by-
laws for correct bid format
Right of Redemption
 A period of time after the
 property sells at auction in
 which the seller can reclaim
 the property
 Seller reimburses the
 amount of the purchase,
 plus associated fees
 Right of Redemption period
 varies from state to state
    Preparing for
Foreclosure Auctions
 Acquire current
 auction information
 Personally visit and
 inspect properties in
 which you are
 interested
 Develop a system to
 track foreclosures of
 interest
Acquire Property
  Information
What is the
estimated market
value?
Include repair or
improvement costs
Stop bidding when
the property ceases
to be a bargain
   Acquire Property
     Information
How much is owed?
Opening bid is based on the
amount owed to the foreclosing
lender
Properties can quickly cease to be a
bargain once bidding begins
Acquire Property
  Information
Are there other liens?
In many cases, the winning
bidder is responsible for
paying off any liens on the
acquired property
Check for liens through a
real estate attorney, title
company, or personally
check county records
Confirm Auction Status
Confirm the current status
of foreclosed homes
Verify that the owner has
not paid the amount in
arrears
Auctions are often
postponed or cancelled
without publishing new
information
Confirm Auction Location
Is the auction at the property
site?
Is the auction at a common
site where multiple properties
are being auctioned?
Check with a foreclosure
listing service, county clerk, or
property trustee
 Confirm Auction
and Bidding Format
Find out what auction format is
being used
Confirm options for bidder
verification
Confirm the bidding procedure
  Determine Bid Cap
Access what is considered a
bargain price
Reasonable auction purchase
amounts are 20% or more below
the full market value
Consider repair and improvement
costs
Consider the area’s rate of real
estate appreciation
      Determine Bid Cap
Figure in available financial
capital
Equity line of credit on an owned
home
Approach the bank for a loan
against a Real Estate Owned
(REO) property
    Bidding on Auction
          Homes
Confirm the property status and
auction date again the day
before
Arrive early
Locate the auctioneer as soon as
possible to ensure validation
Watch your competition
Stick with the bid cap!
         Winning Bidder
Secure all necessary documents from
the auctioneer
Clarify next steps with the auctioneer
and real estate attorney
Check on ownership transfer and
redemption periods
Do not make repairs or improvements
until the home has been legally
transferred
Bank Foreclosures Versus
Government Foreclosures
The main difference is that the
government often forecloses due to
missed tax payments
Auction winner must pay delinquent
taxes as well as other fees
Both offer lucrative investment
opportunities
Verify government auction format and
bidding procedures
For more information:
     http://twitter.com/FCDeals


     http://www.facebook.com/ForeclosureDeals


     http://www.foreclosuredeals.com/wp/feed/


                    Visit Foreclosure Deals

				
DOCUMENT INFO
Description: Foreclosure auctions require more than simply showing up and bidding. Find out how to verify auction information and prepare for bidding and winning foreclosed homes at Foreclosuredeals.com.