Home Foreclosure Auction May Provide Significant Savings
There may be some misunderstanding about the deals that can be found on property at a home foreclosure auction, with some believing it is possible to get something for almost nothing. While it is true that many bargains on homes can be found, generally speaking not all properties will be sold dirt-cheap. During most sales at a home foreclosure auction there is a company that has a vested interest in the property and selling it for less than it is worth is not in their best interest.
While many homes on a home foreclosure auction block may be in good condition and worth the total amount owed to the lender, typically the home is advertised as requiring a minimum bid of at least two-thirds of the value to be considered for sale. In most instances, there is not a minimum opening bid, but potential buyers understand that unless they meet or exceed that stated minimum, the sale will not be completed.
Unlike a mobile home foreclosure, traditional homes have, over the years, appreciated in value. In recent times however, home values have fallen due to the large number of foreclosures and the tighter controls on credit availability, making some of the homes available at a home foreclosure auction valued at less than their original sale price. A home's value is determined by many factors and before bidding on a house at home foreclosure auction potential buyers should have fully researched the home, the property and the surrounding neighborhood to insure they get what they pay for.
Understand Rules Before Making A Bid
When heading out to the first home foreclosure auction potential buyers must be prepared to make good on their bid if they are declared the winner. In most instances, the winning bidder is required to pay a minimum of 10-percent of the winning bid at the conclusion of the auction and the balance at closing, usually within 30 days. Typically, those attending a home foreclosure auction will be ready to assume a mortgage on the property and have a lender's authorization before making their first bid.
Potential bidders should also take the time to visit the property prior to the home foreclosure auction since most of these sales do not take place near the property. Investing in property bought at home foreclosure auction sales can provide a good investment, but if the home is not inspected before the sale can end up being more of a nightmare.