Every day, the government confiscates, seizes and repossesses thousands of items. It's sold at government auctions for up to 90% off the wholesale price. And it's more than just cars and houses. Nearly anything you can imagine is on sale.
Showing posts with label Foreclosure Auctions. Show all posts
Showing posts with label Foreclosure Auctions. Show all posts
Best Deals at Foreclosure Auctions
In my last post, I talked a little about the Auction process. In this post I talk about some tips for getting the best possible deal at a foreclosure auction.
Tip #1: Do your homework
Before attending the auction, it's crucial to do your homework. When you bid on a foreclosure property at a public auction, you cannot retract your bid. Therefore, do as much research as you can on the properties being offered at the auction. Ideally, focus only on one property, or just a small number of properties, so that you have some idea of their market value before bidding on them.
Tip #2: Inspect the property or properties
It's highly unlikely that you'll be able to inspect a property being auctioned. The home owner is hardly going to be agreeable to a bunch of people assessing their home, which they are being forced out of. However, you have nothing to lose by asking for an inspection. If it's not possible, be sure to drive to the property and assess it to the extent you can. The less you can find out about the property, the more you should assume the worst! In other words, assume that the property needs significant repairs and improvements, and budget accordingly.
Tip #3: Identify any liens, liabilities and unpaid property taxes
It's also imperative to conduct whatever research you can to identify any liens, liabilities and unpaid property taxes attaching to the property. When you buy a foreclosure home, you'll also be accepting such liens, liabilities and taxes. If you're not aware of these before you buy... you could be in for a nasty shock. So too, the existence and extent of these should reduce the value of the home, which you should take into account when bidding. Therefore, perform a title search and any other necessary searches to identify any of these.
Tip #4: Know what to bid
Your strategy for monetizing the foreclosure will affect how much you should bid for it at the auction. In other words, how do you plan to achieve a return on your investment? Will you make cosmetic changes to the property and sell it shortly after buying? Will you rehab it and then rent it out or sell it? Calculate your expected return and determine your maximum bid accordingly. Just be sure to take into account the possibility that the property has more problems than may have appeared at first... and have a Plan B... and C.
Tip #5: Be prepared to pay a deposit
In most cases, you'll need to pay a deposit on a property you buy at auction. This is often 10 percent of the winning bid price and must be paid on the day of the auction in the form of certified funds. In some states you will need to pay the balance of the purchase price on the day of the auction; in other states, you'll have 30 days to pay the balance. Be clear on the rules that apply to the auction in question and make sure you have what you need in terms of a deposit.
Tip #6: Stay rational
A foreclosure auction can be fast-paced and intense. It can be easy to get caught up in a "bidding war". Don't! Stay calm and rational, and stick to your plan. Only bid on the properties you have decided to buy and don't bid any more than the maximum you previously decided to pay.
Please also see www.foreclosurespotlight.com
Tip #1: Do your homework
Before attending the auction, it's crucial to do your homework. When you bid on a foreclosure property at a public auction, you cannot retract your bid. Therefore, do as much research as you can on the properties being offered at the auction. Ideally, focus only on one property, or just a small number of properties, so that you have some idea of their market value before bidding on them.
Tip #2: Inspect the property or properties
It's highly unlikely that you'll be able to inspect a property being auctioned. The home owner is hardly going to be agreeable to a bunch of people assessing their home, which they are being forced out of. However, you have nothing to lose by asking for an inspection. If it's not possible, be sure to drive to the property and assess it to the extent you can. The less you can find out about the property, the more you should assume the worst! In other words, assume that the property needs significant repairs and improvements, and budget accordingly.
Tip #3: Identify any liens, liabilities and unpaid property taxes
It's also imperative to conduct whatever research you can to identify any liens, liabilities and unpaid property taxes attaching to the property. When you buy a foreclosure home, you'll also be accepting such liens, liabilities and taxes. If you're not aware of these before you buy... you could be in for a nasty shock. So too, the existence and extent of these should reduce the value of the home, which you should take into account when bidding. Therefore, perform a title search and any other necessary searches to identify any of these.
Tip #4: Know what to bid
Your strategy for monetizing the foreclosure will affect how much you should bid for it at the auction. In other words, how do you plan to achieve a return on your investment? Will you make cosmetic changes to the property and sell it shortly after buying? Will you rehab it and then rent it out or sell it? Calculate your expected return and determine your maximum bid accordingly. Just be sure to take into account the possibility that the property has more problems than may have appeared at first... and have a Plan B... and C.
Tip #5: Be prepared to pay a deposit
In most cases, you'll need to pay a deposit on a property you buy at auction. This is often 10 percent of the winning bid price and must be paid on the day of the auction in the form of certified funds. In some states you will need to pay the balance of the purchase price on the day of the auction; in other states, you'll have 30 days to pay the balance. Be clear on the rules that apply to the auction in question and make sure you have what you need in terms of a deposit.
Tip #6: Stay rational
A foreclosure auction can be fast-paced and intense. It can be easy to get caught up in a "bidding war". Don't! Stay calm and rational, and stick to your plan. Only bid on the properties you have decided to buy and don't bid any more than the maximum you previously decided to pay.
Please also see www.foreclosurespotlight.com
Buying Foreclosure Properties At Auction
Properties that are not sold during pre-foreclosure inevitably end up being offered for sale at a trustee sale or public auction. If you don't wish to negotiate with sellers during the pre-foreclosure stage - or otherwise wish to invest in properties being auctioned - here are some useful hints and tips for buying at such an auction.
Firstly, I urge you to observe a few auctions before buying at one. The newspaper will publish notices containing the dates and times of various foreclosure auctions. Go and attend some of these to get an idea of what is involved.
Some of the things to note are the process of the auction, how to register as a bidder, the requirements regarding paying for a property (e.g. whether you need a cashiers check or certified funds on auction day and when you must pay the balance), and how professional - and inexperienced - bidders handle the bidding.
When you decide to participate in an auction, the main thing is to stick to your budget and not get caught up in the emotion and excitement of the auction proceedings. A representative from the bank will typically make a bid that covers the mortgage. From here, the bids will go either two ways. Up or nowhere.
Assuming that the bids go up, and you keep to the maximum amount you're willing to pay, you may or may not end up purchasing the property. If you don't end up getting it, don't worry too much about missing out. You win some, you lose some! At the very least it is a learning experience. And if you have done your figures right, you have probably avoided getting yourself into a dud deal.
Meanwhile, auctions are still great places to network with other investors and foreclosure real estate agents, which is bound to assist your business long term.
If you do end up buying a property, then - depending on where you live - you should be aware of the concept of "redemptive rights". In certain states, within a specified period of time - from a few days to a year - the person whose property was foreclosed has the right to re-purchase the property.
If these rights apply in your state, be very wary of bidding a high amount, let alone spending a lot of money, on a property you buy at auction. The last thing you want is to spend a lot on improving the property only to have it bought back. While you will be paid for the property and such improvements, you probably won't make a profit. Considering that you could have invested your money, time and resources elsewhere, this is a huge opportunity cost to be avoided.
If no one bids on the property at the auction, the bank will be forced to buy the home. In this case, the home becomes "real estate owned" (REO) and anyone who wants the property will need to negotiate directly with the bank.
www.foreclosurespotlight.com
Firstly, I urge you to observe a few auctions before buying at one. The newspaper will publish notices containing the dates and times of various foreclosure auctions. Go and attend some of these to get an idea of what is involved.
Some of the things to note are the process of the auction, how to register as a bidder, the requirements regarding paying for a property (e.g. whether you need a cashiers check or certified funds on auction day and when you must pay the balance), and how professional - and inexperienced - bidders handle the bidding.
When you decide to participate in an auction, the main thing is to stick to your budget and not get caught up in the emotion and excitement of the auction proceedings. A representative from the bank will typically make a bid that covers the mortgage. From here, the bids will go either two ways. Up or nowhere.
Assuming that the bids go up, and you keep to the maximum amount you're willing to pay, you may or may not end up purchasing the property. If you don't end up getting it, don't worry too much about missing out. You win some, you lose some! At the very least it is a learning experience. And if you have done your figures right, you have probably avoided getting yourself into a dud deal.
Meanwhile, auctions are still great places to network with other investors and foreclosure real estate agents, which is bound to assist your business long term.
If you do end up buying a property, then - depending on where you live - you should be aware of the concept of "redemptive rights". In certain states, within a specified period of time - from a few days to a year - the person whose property was foreclosed has the right to re-purchase the property.
If these rights apply in your state, be very wary of bidding a high amount, let alone spending a lot of money, on a property you buy at auction. The last thing you want is to spend a lot on improving the property only to have it bought back. While you will be paid for the property and such improvements, you probably won't make a profit. Considering that you could have invested your money, time and resources elsewhere, this is a huge opportunity cost to be avoided.
If no one bids on the property at the auction, the bank will be forced to buy the home. In this case, the home becomes "real estate owned" (REO) and anyone who wants the property will need to negotiate directly with the bank.
www.foreclosurespotlight.com
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