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How Does A Real Estate Foreclosure Auction Work?
If you've heard about getting a house at a bargain basement price with real estate foreclosure auctions, you heard right. However, you do have to know what you're getting yourself in for. Never buy a home from a real estate foreclosure auction that you haven't inspected yourself AND had a hired home inspector go through. The main thing to keep in mind with any kind of real estate auction is that once that gavel hits, the home is yours – for better or for worse.
You Marry The House
You should treat a real estate foreclosure auction more seriously than you would in selecting a marriage partner. Getting divorced is a heck of a lot easier than trying to unload a house you don’t like – especially in today's tight economic climate. That property becomes more involved with your life than a spouse ever would. It might even wind up taking over your life – in ways both good and bad.
Just like in marrying a person, when you "marry" a house, you also take on not just the house, but any issues that come with the house. Part of your inspection into a house on a real estate tax foreclosure auction should include how much back tax or any other fees are owed on it. You will then be responsible to pay all of those off – even though they were run up by the previous owner.
Be sure you check with the laws about real estate foreclosure auctions before bidding. Some states will require that the house must be paid for in cash at the auction. And then some counties within your state will have differing rules. Some will also have specific real estate tax foreclosure property laws, whether you are buying a home to live in it or as an investment.
Other than the huge amount of money involved, the actual auction is very much like a livestock auction. Everyone's in place and raises their hands or signs to make a bid. Be sure you know in advance how much a bid is. For some auctions, it's $1000, for others it's $5000. The bank that owns the home usually makes the first bid, even though they don’t want to keep the home.
Other fees you need to find out about before the real estate foreclosure auction includes the cost of title transfer fees, document stamps and the auction fee. And also, you have to keep in mind that a mortgage does not come with the house.