When lenders foreclose on a property, they want to get cash quick; the fastest way to do that is to sell the property in a foreclosure auction. A foreclosure auction is a great opportunity for investors to obtain properties at well below market value.
The unfortunate part of buying a foreclosed property at an auction is that they may have other liens besides the mortgage. As with any investment property, you need to evaluate the property to make sure it’s a good deal. Do your research; look into the property to make sure that there isn’t a second mortgage, or overdue taxes. The winner of the foreclosure auction will be expected to take care of any other liens on the property.
If you go to a foreclosure auction, the auctioneer will provide you with a legal description of the property prior to bidding. In order to actively bid at an auction, you usually have to obtain prequalification for financing, but some states allow a certain amount for a deposit, with the remaining balance due within 24 hours. Each state has their own rules, so it’s important to find out your state’s requirements prior to attending a foreclosure auction.
If the foreclosed property does not sell at the auction, it gets added to the bank’s collection of bank owned properties, also known as REO properties.
You can avoid the hassle of a foreclosure auction by viewing Realnet’s foreclosure listings. We have the best investment property in Florida!