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Learning About How to Buy a Foreclosure

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By : Gwen Lopez    99 or more times read
With the popularity of real estate foreclosures in this day and age (one in every 3 houses for sale in Florida is a foreclosure), it is best to do your due diligence before putting money down on one.

I have recently spent a lot of time going to the Dade County Courthouse and watching live foreclosure auctions. I have learned a lot while just sitting there and watching professional investors.

I have found that the majority of the properties for sale at these foreclosure auctions are not even bid on. Prior to the auction, you can obtain a list of properties that will be presented at the upcoming auctions. This can be time consuming for investors to check out these properties. Not to mention that I have found that many of the properties do not ever actually end up on the auction block anyway.

Prior to the last Miami Dade auction I attended, I checked out 12 houses in my area that were on the list to be auctioned. At the auction 6 of them were taken off the auction list for one reason or another. The county and bank spoke on auction day and they simply removed these properties. No more was said. I was disappointed as the main house that I was interested in for a possible purchase was simply taken off the list.

Of the remaining list of properties (6), I found that 5 of them were in completely in hospitable areas. I was wondering what the investor/homeowner was thinking prior to these purchases.

The last property which peaked my curiosity had people residing in it. I personally would not take the chance to bid on a property I could not get in to. During the auction, when this property was presented, the bank representative advised us in the crowd that they, as a bank, would bid over anyone who bid less than $230,000. In my research, I had found that the current mortgage held on the property was $205,000. It is my thought that the extra $25,000 of this number was from outstanding fees.

I had also done my due diligence prior to visiting this auction and found that the current market value of the home was $185,000.

What the bank is expecting to get back and what they will make are two completely different figures. I cannot imagine anyone who would have bid over $230,000 for that property that they could not even check the inside of the home.

I am just wondering what is going to happen in the future to the housing market after the banks try to unload all of these properties in order to remain solvent. The banks are currently running on government TARP funds that will soon run out. Then, the real low priced homes will finally hit the market.
If you are looking for more information on foreclosures available in the market, check out Free Foreclosure Blog, they provide actual foreclosure lists without requiring you log in to the website.

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