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How to Buy Property at Auction

Once you have found a property you are interested in, it's a good idea to drive by the property to check out its condition and also get a feel for the neighborhood. Usually, you cannot inspect the interiors of foreclosures before the auction. It is also good idea to research local sales or comparable sales online or in the county records.

After looking at the property you are still interested in buying the property at auction, call the trustee to confirm the date, time location and requirements for the auction. Usually auctions are conducted at a public place in the same county the properlocated. You can also call the county clerk to get the location of mortgage foreclosure auctions. Before you attend the auction that you want to purchase at you should attend a few auctions so you are comfortable with the process before you are going to bid on a property.

Determining How Much To Bid

Before the auction contact the auction trustee listed on the foreclosure notice, and ask about the minimum bid the bank will accept. To find out if the property is a good bargain and how much you want to bid you should get the following data on the property.

  • Estimated market value
  • Outstanding loan balance
  • Any outstanding property liens
  • Repair costs

It is critical to do a title search, which will tell you whether there are any other mortgages on, or liens against, the property. If you buy a home that carries extra mortgages and liens, you will be responsible to pay them off.

Take the Estimated Market Value and subtract loan balance, additional liens and repair costs to come up with a base number for your bid. If the opening bid is much higher than your base bid the property might not be a good value for you. You should always determine your bidding strategy and upper limit before you start bidding.

Requirements vary by state but bidders usually need to bring the full amount they want to bid in the form of cash or cashier's check or a percentage of the bid amount in the form of cash or a cashier's check and pay the remainder of the amount within a certain time period if they win the auction.