Buying a Foreclosure in Auction
How Do Foreclosure Auctions Work?
When a home is sold at auction it is called a Trustee’s Sale. Sales are handled differently in each area, so you would want to check with your county on its rules and guidelines on buying a foreclosure from auction.
Generally speaking, purchasing the property as-is and proof of financial qualifications are necessary. Sometimes buyers are not allowed to even see the home before the sale. The problem with that is the buyer does not know how much the cost will be for repairs, or if the tenant had previously destroyed the home. There is also the chance you will have to evict the current tenant or owner from the property which is another costly process. After the title transfer, there is also the potential that any negative liens on the property before is now transferred to you.
When buying a home from a Trustee’s Sale you want to make sure you are prepared before. Many individuals professionally buy and flip homes and attend these auctions looking to acquire more property. To avoid problems after a title, transfer some people also may pay in advance for a title search. If you want to buy at a Trustee’s Sale you do not need a real estate agent. It is important to be well informed prior though.
Buying a Foreclosure from the Bank
Banks generally do not sell homes to investors or homebuyers. Instead, they opt to sell their properties for wholesale. If a bank does choose to not sell in bulk but instead to individuals then they commonly use what is known as an REO agent, which is otherwise a real estate agent which specializes in foreclosure.
It is common to buy from a bank in bulk. In bulk sales, the bank puts together a package of properties which they sell in one transaction to one person or group. Buying bulk foreclosures is a good investment opportunity if possible.