Both first-time and expert homebuyers flocked to foreclosure auctions knowing that these are places where they can find cheap houses for sale.
A foreclosure auction in Roselle, New Jersey was attended by potential homebuyers who hoped to find cheap houses for sale that they could purchase. For example, in an auction of 375 foreclosure properties, one house with seven bedrooms and five bathrooms, estimated at $565,000, received an initial offer of $129,000 and was sold at $245,000, less than half of its fair market value.
At Jacob K. Javits Convention Center in New York, about 1,400 potential homebuyers attended cheap houses for sale auctions. The attendance was bigger than the previous year’s first foreclosure auction of Real Estate Disposition Corp.
The increase in the number of auction goers is attributed to the continuing rise of foreclosure rates and the abundance of cheap houses for sale.
Real Estate Disposition Chairman Robert Friedman said that the economy and foreclosures are currently in their worst conditions ever.
He added that the list of cheap houses for sale in the company’s portfolio is growing every day, and foreclosure rates are unprecedented since it started its auction business 19 years ago.
Real Estate Disposition is hired by financial services institutions to handle cheap houses for sale at auctions. In 2008, the auction house held about 300 auctions and for 2009, expects to host an estimated 400 foreclosure auctions.
According to Todd Gladis, vice president of Real Estate Disposition, every potential homebuyer has a role to play in helping reduce the number of foreclosed homes.
In foreclosure auctions, homebuyers are required to pay upfront an equivalent of 5 percent of the property’s total sale price. They are also required to pay cash or issue a personal check for the unpaid balance of the down payment. The remaining balance could be paid through financing with the help of mortgage specialists.
Auction houses usually add a fee of 5 percent to the final sale price of each foreclosed property that has been sold.
Foreclosure auctions attract three types of audiences. One group is composed of experienced bidders who earned their living purchasing, repairing and selling foreclosure homes. The second group is made up of first-time buyers while the last group is composed of people who just want to witness the whole auction process.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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