Some of the cheapest buys are in foreclosure home auctions. What this represents for investors is an opportunity to strike big in the profits department. When a home undergoes foreclosure and reverts to the lender this lender would want to resell the home immediately to recoup their losses. These lenders are not motivated by profit when they sell these homes they mostly want to just recover the unpaid portion of the loan. This is the reason why these homes sell for a low price at auctions.
Preparations for Home Auctions
Buyers can realize great savings from purchasing property through foreclosure home auctions. But buyers should establish their housing requirements first before actually participating in one of these auctions. A trip to the county courthouse can tell you what auctions are scheduled and for which property. You should be prepared to roll up your sleeves and research the property or set of properties you will place a bid.
Documents relating to a home scheduled for auction are public domain. You can inspect the title at the county records office and see if there are liens on the property. The information on the position of the home in terms of outstanding mortgage loan is also available here as well as its tax records.
It is also important to approximate the value of the property. In doing this you should take into account the cost of repairs and other expenses and compare them with the value of similar properties in the same neighborhood. This way you can set a cap to the amount you will be willing to bid.
If this is your first venture into foreclosure home auctions you can improve your knowledge of how these auctions are conducted by attending one or two auctions as an observer only. This will give you a feel of the atmosphere at auctions and know how to conduct yourself when you actually participate in one.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.