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What is a Foreclosure Auction?
A foreclosure auction is a public sale of a property that is being sold because its previous owner failed to pay back a debt. In most cases, foreclosures happen when a homeowner defaults on payments of their mortgage loan. However, a foreclosure auction can be called for if the homeowner owes a government tax debt as well. Foreclosure auctions happen on all kinds of real estate, including residential and commercial properties. Auctions are the most common types of foreclosure sales, and sales happen almost every day in cities and towns across the country. For homebuyers and investors, foreclosure auctions are one of the best sources for discount real estate you'll find anywhere. Most homes sold at foreclosure auction sales go for anywhere from 30% to 60% below their actual value. Best of all, anyone can attend a foreclosure sale and bid, so these savings are open to everyone.
How do Foreclosure Auctions work?
Buying property at foreclosure auctions is in many ways much simpler than buying a home through a foreclosure agent. Auctions are open to the public, so you don't need any special credentials or permission to attend. All you really have to do is find out about a sale, show up at the time and day it occurs, and bid. If no one outbids you, you'll be be recognized as the winning bidder, and the rights to the property will be awarded to you upon payment of your bid.
How Does a Home Get to Foreclosure Auction?
Of course, how a home gets to a foreclosure auction is another story. The process begins when a homeowner defaults on their mortgage or a tax debt. If the homeowner cannot make good on their default within a given period of time, depending on state law, the lender will have the right to schedule a foreclosure sale of the property as a means of recollecting the debt owed. In some states, the lender may have to file a case in court to be granted the right to foreclose. In others, they may just be able to proceed with setting a sale date on their own. In either case, if the homeowner does not pay off the debt owed before the sale occurs, the foreclosure auction of the property will go forward as planned and be awarded to the highest bidder.
Buying Homes at Auctions
Buying homes at foreclosure auction is the best way to ensure you get the discount you want on your next real estate purchase. Whether you're in the market for a new home for yourself or your family, or you're looking to buy property for investment purposes, the savings you earn through buying at foreclosure auction are unlike anything you'll find through an agent or on the open market. The discounts you'll get at auction mean earning instant equity in your home, which makes generating investment value through appreciation over time or by flipping the home much easier.
Of course, there are plenty of tricks to the trade. Not every foreclosure property is going to offer top value, and you have to know how to pick and choose the right homes. You also have to know how to buy at auction. This means calculating costs ahead of time,and carefully planning your maximum bid so that you ensure you get the value you want out of your investment. It also take discipline to stick to your plan and not get swept up bidding more than you want to in the heat of an auction bidding war.
What are the Types of Auctions?
As we mentioned earlier, there can be many different sources for foreclosures at auction. The most common is the bank foreclosure. Since most of the mortgage lending done in the U.S. is by banks, most of the homes that end up at foreclosure auction are bank owned foreclosures. However, government agencies can often be responsible for foreclosure auction properties. Tax lien homes sold through foreclosure auction are sold through government foreclosure auctions, but other foreclosures from agencies like HUD, the VA, or Freddie Mac and Fannie Mae are common as well. These agencies all specialize in assisting banks in lending to buyers, and when those buyers default, the bank leaves it up to the agency to collect the debt. Whether you're buying government properties or bank foreclosures at auction, the process is generally the same, and depends on state law more than the lender. Learn more about bank foreclosures and government foreclosures, as well state by state foreclosure laws, on our site.
How to Find Foreclosure Auctions?
This is one of the commonly asked questions people make when they discover about how profitable buying a home at auction can be.
Finding foreclosure home auctions on your own can be a difficult task. They're just not marketed like regular properties sold by real estate agents. At BankForeclosuresSale.com, we do the hard part for you. By tapping the contacts we've built after more than a decade in the real estate industry, and by carefully researching local and regional markets, we offer our members a constantly updated, comprehensive database of over 2 million foreclosure properties currently available through auctions and other sales across the U.S. All you have to do to start viewing homes in your area is search for what's available among our home auction listings. You can review detailed property information, photos, and contact information to find out more. Our listings provide all the tools you need to buy the best properties the foreclosure market has to offer.
What's the Difference Between Trustee Sales and Courthouse Auctions?
There are two main types of foreclosures, judicial and non-judicial foreclosures. Judicial foreclosures require a lender to get a court's permission to foreclose on a property. Non-judicial foreclosures allow the lender to sell the property themselves in the event of a default. A Trustee Sale is a non-judicial foreclosure sale. It gets its name because a trustee of the lender usually schedules and runs the sale as an auctioneer. A Courthouse Auction is a judicial foreclosure sale. It is usually held at the courthouse or at the property itself, and is scheduled and run by either the Sheriff or a representative of the court. Both Sheriff sales and trustee sales can provide values for buyers, and for the purpose of getting the best deal, they are equally as effective.